I would first identify if you have a medium duty large bearing, or a regular large bearing rear axle (same bearing). I would use a decent set of calipers or micrometer to verify the size of the bearings you have and the axle orifices. Once done with all these steps I would make the decision to replace the housing, or to cut off the ends and weld on new axle ends. .008 is WAY too much clearance for a bearing location fit, and should be addressed as soon as possible.
OK, I went to the local autoparts store and picked up a set of bearings and seals. The bearings they handed me were much smaller that what I have (2.75" OD approx). They went back to the book and came up with the 88128R8 Large Bearing which was 3.125 x 1.50 which is what I have. They had two rear axles listed 2345 lbs and 3300lbs, and mine turned out to be the 3300lbs axle.
I slipped the new bearing in the housing and it measured .006 gap. My buddy at the local buggy shop suggested that I get a cheap set of feeler gauges and cram a couple of small (002) feeler gauges in there and butten it up? Hookey but it might work.
I did call Currie and they will sell me a Torino housing with axles, bearings, and disk brakes for $1,400. Not cheap, but it will give me a new rear end with disks and ebrake. Hum
