The Axles can telescope inwares on themselves to some degree making them shorter
In order to move the differential up and down you need to support it with a Jack and I think you need to remvove the Differential Mount completely. That is the part the very rear of the Differential that attaches to the Body and to the Differantial.

I can remember on Mine I had stick a Pry Bar in between the Hub and carefully pry to get it in. However, I have Mercedes Axles.

Are you installing Original Mercedes Axle?

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84 300D, 82 Volvo 244Gl Diesel