Just some general info here ... The differential itself rides on bearings just like any other diff. The output shafts just slide in from the sides an run on their on bearings. This is just like a full floating axle setup. You can pull the shafts out with a slide hammer. Now the output flange splines with the shaft. The infamous seal is between the flange and the axle case. The output flange is held onto the shaft by that center nut (with two o-rings). This nut has nothing to do with holding the shaft into the diff - it only holds the flange on. The brake assembly keeps the shaft in the diff.

Anyway, when the center nut gets loose (170 lbs-ft), the flange can move a little bit along the splines. This affects the seal only. Most of the time just snugging up the nut solves the problem. Seals wear/mold onto a part and if it change slightly (i.e. moves) it can leak. There is no reason to suspect that the differential itself is damaged by the motion of the flange. Remember that we are talking about 1/8" movement at the edge of the rotor. That's what, 1/40" at the seal?

The brake chatter problem is kind of chicken and egg. When the seal gets some oil on the rotor, it chatters. It can start to leak b/c the nut can back out from chattering :). Next time you get chatter, clean the rotors with Brake-clen and see if it solves the chatter.

Gerald