Axle bearing adjustment

Thanks - I have pretty much confirmed the housing is worn. There has been work done on the diff in the past. The only reason I got into it in the first place is - the seal on that side leaked, so I replaced the seals. I noticed the slop when trying to adjust it then. It's about . 025 . I do get a clunk from the rear when it upshifts in to second. I think I'll pull it once more and check itvwith an inside micrometer. I wonder what the tolerance is supposed to be.