8-3/4 hard to turn the wheels

Could it have burned the axle bearings out of grease too? What should I tell the shop to look for?
I have never used the green type ball-bearings. So I cannot say.
With the tapered bearings you would be Ok cuz they run in their own grease, and the load is spread out over the entire face of the race, with several rollers sharing the load at the same time.
Whereas with ball bearings you are looking at a different picture. If I had to guess; if they were properly greased in the first place, I'd guess they will have survived.
Since it has to be taken apart for inspection anyway, I would let the installer worry about it.

But you just provided a huge clue, when you said the brake shoes are cooked.
Since we are talking about the rears, there are only three ways this can happen;
1) a too-tight adjustment; be it either the cable or the star-adjusters, or sticking parts
2) assembled wrong,
3) the hydraulic pistons not retracting into their bores

#3 is the wild card because several things can lead to that condition.
Principally, the fluid might not be returning to the master. This can happen in several ways;
mechanically, hydraulically, or a super-heated air-pocket.
Mechanically; we are talking about rust in the wcs, or a brake-pedal not parking at the top of the stroke.
Hydraulically; it could be a faulty flexhose. They rot from the inside out, and sometimes a piece will partially break free and become a check-valve.
Or the M/C pushrod can be too long, closing the return ports permanently. If simultaneously your rear brake system has air in it, then that air when heated, can expand and force the shoes out into the drums. Of course this can start out mild, and then become a chain reaction, as the air picks up more and more heat. This can happen without air as well.
But the whole thing can only happen if the fluid cannot return to the reservoir, and that usually only happens if the C-ports are blocked, either by the piston or rusted up, or the flexhose is rotten, and of course with 40/50 year old lines, they could be the culprits just as well. It could even be a faulty Combination Valve; I have seen the rubber parts in there swollen up bad enough to freeze them in a permanently applied position.
So,
before you ship the car back, I would suggest a lil homework is in order. But I think, perhaps unwittingly, you already did it. You reported that the shoes were burned up. You have to fix that, but that is a separate issue. Since you know this, it implies that you took the drums off. And so that particular (#3 above) is no longer valid. So if the axles are still hard to turn with the driveshaft off, then you have isolated the problem to being in the rear-end itself. And lots of guys have given helpful advice as to troubleshooting that.
One thing that I don't think I saw was a bent housing. Tapered bearings can run loose enough to not be affected by a mildly bent housing. But ball-bearings have no such forgiveness. If they are forced out of alignment, they will squeeze the grease out, and run steel on steel, making plenty of heat. But if your housing is bent enough to cause that, then your installer would surely have noticed it, as he was "hammering" the axles into the tubes.