Someone with more experience overhauling finals might comment, but I'd be a little concerned with the pinion gear flaking out as much as it is.
BTW D6C10K, with your problem with the steering clutch's not releasing, did you change all the disc assemblies & metal discs on yours? Were the inside splines on your hubs rough like mine are (see pics)? We have decided to buy all new disc assemblies & metal discs & just clean up the rough on the inner splines.
D610K,did you have a chance to try out your full circle clutch seals and could you share the results please.
Better to get good used cat parts than Classic or any aftermarket. I saw a Chineese bull gear destroy the steering clutch and bevel gear case of a mint condition 13X 955. Some $avings.I had a final rebuilt in my 6D a year and a half ago, used a cat pinion, but replaced the outer gears with cat classic. they ran 116 hours till the intermediate pinion shelled out taking the other outer gears with it.
my advise is never ever use cat classic anything. There is NO cat warranty on any of that "classic" junk. I was lucky, no tooth got caught between gears and destroyed the case. this was 10G that I didn't need to spend.
One thing leads to another....the ring gear needs to be removed to get an accurate pre-load torque on the shaft once your shims are set. As mentioned torque should be 30 - 40 in-lbs although up to 60 in-lbs is probably ok. Might be able to reduce some of that back lash in the process.