What caused this on a 489 suregrip?

Probably wrong but gonna through this out for thought as I had a 489 SG center in a 742 case that was never an issue with 4.56 Chrysler gears, but when going to 3.55 I got from the DR. kinda the same rub on the center when attempting to set pinion height, although lightly as the pinion was much larger. Ending up shaving the pinion head 030 to avoid sourcing a new correct Dana center. I agree if it is a 489 case and SG center this is a loose pinion.

A little confused as the OP mentions a 741.