So, the wheels will turn free enough now - I can spin them with my hand and they'll drag to a stop but not stop immediately. My only worry now is the play. I can rotate the wheel back and forth about 5 degrees, and when rotating it back and forth to the beginning and end of the "dead zone" there's a soft clunking sound from the center of the rear end, almost like lash between the ring and pinion?
I have no idea if this is normal - this is my first 8.75 and first live axle car too. Everything else I've owned has been transaxles with CV joints.