I know that you have to be careful inserting the axles in the housing as not to tear the seal with the splined shaft. The seals are in the side of the tranny and not on the shaft. It sounds to me the shafts arent engaged all the way (leaking AND grinding).

It is possible to insert the shafts and it looks and feels like they are all the way in. but, in reality only the tip is in @ 1/2 in of the splines actually engaging. If thats the case the grinding you are hearing, is the shaft walking out a bit and grinding trying to re-engage. If you get it taken care of quickiy (assuming that is what happened) shouldnt be a big problen. Just be sure your tech drains all the fluid to get the shavings out. If you can, be there to look at the drained fluid so you and your tech can make the call on wether or not to open the tranny and replace the diff and shaft.

I truly hope this isnt the case. Good luck and post the outcome. Hope this helps.....

Craig