1988 300te Differential help

[droland52]

Coming home from Key West, the rear differential on a 300te (170K) began to howl and bellow smoke. Hot fluid was dripping from the differential case and flung on the rear hatch. It had a previous light leak, had it checked and was OK'd. Now, it makes a grinding noise in D or R, and will not move. Makes the same noise when pushed in N.With the help from a friendly motorist, I rented a UHaul and dolly to carry it the final 130 miles home.

I have located a used differential from an eBay used parts dealer in SC ($150+50 shipping). During the discussion with him, there was a mention of a possibility of a driveshaft bearing seizure. My mechanic confirmed this possibility, however, when this occurs, it wipes-out the differential(?). The excessive heat changes things.

These rearends are suppose to be bulletproof. How did this occur - low fluid level? How do I proceed with this?

Best Regards