I can't say exactly why the noise occurs on decel, but it is a common way for noises to occur due to worn pinion bearings. It also can happen due to worn center driveshaft bearings and due to loose slip couplings on the driveshaft itself, so don't let me scare you too bad.

My comments were to keep you from wasting time on a seal repair that either might not hold or may hasten the demise of the slowly sinking differential.

BTW, doing nothing is a good alternative. Keep gear oil in it and when it goes get a used unit and slap it in. This is a very efficient repair due to the good overall long term life these units have. A used unit is fairly low risk and definitely cheaper than a complete overhaul with ring and pinion.

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Steve Brotherton
Continental Imports
Gainesville FL
Bosch Master, ASE Master, L1
33 years MB technician