Rear axle noise?

My 97 XJ has the 8-1/4 3.55 LSD axle. This is a project vehicle I bought last week. It has 184,000 miles.

Basically over 20 mph I start to hear this noise that sounds very much like something from the rear end, but doesn't have the typical bearing roar I've heard on other vehicles. Its almost a whirring or strumming noise, though the exhaust may have something to do with that. I'm nearly certain that this noise is not entirely the exhaust. I've run the engine around 1500-2000 RPM while in neutral to compare.

The pinion seal must have leaked at one point in the past, because there was a ton of build up all around it. I cleaned it all off and its not leaking now. With the axle jacked up, I felt for play on the wheels and I can rock the wheels in and out about 1/16-1/8". I suspect this means my axle bearings or more are shot?

I also pulled the fill plug, and it seems to have plenty of fluid. It's bluish which makes me think it may be Amsoil's "Blue Bug Juice" (severe duty 75w-90). The limited slip seems to work just fine. Both wheels turn at the same time and speed. I don't hear any chattering or feel any vibrations.

I also pulled the driveshaft and regreased the u-joints. There was slop in the transfer case u-joint and the grease in both was pretty nasty. I plan on replacing them with new Spicer Life Series. But I don't think the u-joints could be making this noise?

I'm mostly interested in identifying the noise before I buy and replace parts or the entire axle. I could go either way on the fix. Regearing, etc. might be nice and after reading the how-to's it doesn't seem too bad as long as you have a couple of special tools and work patiently and methodically.

The pinion bearing in my 98 8 1/4 starting making noise at 140k. I would get a very subtle, but definitely present rotational growl on throttle let off. At the time I researched it and rear end noise in the 8 1/4 is a common symptom with most people simply running it. I am not wired that way unfortunately and had to address it. I had the carrier bearings, as well as the pinion bearing replaced and it's been quiet for 25k. I had the work done as I was not trained in setting up a differential at that time. It was quite expensive at a local independent shop, around $1000.

Thanks. This is a pretty loud and constant noise as long as the vehicle is moving - acceleration, deceleration, or coasting does not affect the noise. I guess the noise sounds somewhat like tire noise, but loader or heavier. I have BFG A/T KO's on both of XJ's. I've had the BFG A/T KO's on my 01 XJ for 10 years and after a few rotations I get tire noise out of the front that some may think is a bearing, but its definitely not a bearing. The rear is always quiet. On the 97 XJ, the front is dead quiet and I get the noise out of the back. Tire rotation did not change the noise at all. I pulled the brake drums which looked great. I am able to move the hub up and down slightly. My plan is to remove the cover and take a look. If all seems good, I'll change the wheel bearings and if the noise persists I'll plan for total replacement.

I pulled the cover and let it drain. The ring gear had yellow stuff on the edges and top of the teeth. The ring gear teeth have no shiny spots. The inside surface of the housing is rusty colored. It looks to me like someone had this thing rebuilt and the yellow is what's leftover from compound used for reading the gear pattern? Then it was refilled and never touched since. I'm going to change the wheel bearings and fill it back up with 80w-90 and a bottle of Mopar Limited Slip Additive. I'll let you all know how it turns out.

Do the axle shafts have to be perfect or like new to be reused?

I pulled one side and while I can't feel a lip or groove, where the bearing rollers are, it isn't shiny. Should I just bite the bullet, and put in new axle shafts or use an offset bearing?