Hello, New to Corvette ownership, bought a 76 C3 last fall, with 90k miles, drove it home stored it till now. Transmission has just been rebuilt do to 16 years of storage from a frame up body restore. So all the trans seals needless to say were leaking. Engine runs, sounds and looks great, drives good. The problem is when you start driving forward slowly there is some very strong klunking and binding jerks, seem to be from the rear differential.

.070 is pretty tight for a backlash on a diff...normal range would be around .080"-.013"...
Sounds like your posi clutches need some lovin! Be sure to pour a couple of bottles of posi-lube in it when you get it all back together.
Half-shaft yokes(side yokes) really should not have any play in them...they always do, of course, but technically, they should be snug. If one side is looser than the other, you may have a worn yoke, which would cause the excess free-play(in/out).
You say your side gears have play in them?? The axle gears(side gears) should not move AT ALL...in fact, it should be tough to turn them with one yoke locked, as in if you have one wheel on the ground, and the other up, trying to turn it. If you can move the two side gears with your fingers...somethings not right in paradise... If the side gears are loose enough that you can tell they're loose, then the posi clutches are prolly totally wiped out, which would also cause a clunk/lurch when the car is moving...

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you may want to change the diff fluid and start it over with fresh fluid and additive before you go pulling it out. cthulhu2008-04-25 22:27:49

also...   you will proably hate a 2.73 rear end...

When the rear end fluid is changed, it is necessary to add the GM posi lube, and drive in very slow figure 8s for a couple of minutes.  That is a cheap last try before taking it apart as Joel described.

Larry

[QUOTE=our76C3]

The car will be driven mostly Highway , that's why the gear change. The rear end fluid was just changed with the transmission rebuild, with no change in the klunking, which is very pronounced. Thanks

[/QUOTE] cthulhu2008-04-27 17:29:24

    I agree that the problems seems to be to posi clutches. The GM "fish oil" additive is very important and should not be over looked. Try to find out if it was added at the change. If it wasn't, add it ASAP. Then do your testing again. It is cheaper than a rebuild. If you don't mind Granny's grocery gitter passing you in the fast lane, do the gear change. You won't see better gas mileage with the lower gear. Actually, you see a slight decrease. The engine and tranny will work harder to get to speed and maintain it, using more engine out put for lower results will cost you  economy. Vettes are built to pass - not be passed. Hope this helps.

Another thing to check is tire size...make sure you have the same size tires on both sides of the car, in the rear...I know it sounds silly, but, it happens more than ya think...

I was(and still am) under the impression the diff was out of the car at this point?

Hey,