When I had it on the stands, I could take the wheel and it would move in and out about 3/8 inch. This may be standard "slop" in the axle movement.
As m_m said, that's not right. There is no slop in a wheel. Well, there is but it's in the range of .001" to .010" which is in the thousandths of an inch bearing free-play.
If you meant the axle shaft could move in and out that much, then yes that's normal float.
I will have to look about the bearings in the spindles. I don't recall seeing any.
The spindle bearings are caged roller bearings pressed into the back-side of the spindle. Looks like the #8843 on this page:
https://www.wildhorses4x4.com/category/s?keyword=spindle+bearing
They rarely wear out as they're only really used in 4wd or when the hubs are locked. But they can get dry and rust out, so are always in need of checking any time you have the spindles off. If you did not remove the spindles then you would not have seen them.
They were splines on both shafts which I lined up. I don't think it's a broke axle since both turned when I had it up on the stands. As Ron mentioned, since I have to remove the axle, I will inspect the brakes, cylinders bearings and hoses.
If you have not seen or read the bearing adjusting procedure, check it out in the manual or ask us here and we can run down the list. It's not like doing car or 2wd bearings.
The expected results are the same, but the method of adjustment is different and counter-intuitive.
My thoughts are axle U Joints but don't know how to inspect the differential.
If it's the u-joints making that kind of noise then they were not good to begin with or something you did after installing them broke a joint or an axle yoke. It sounds like the axle shaft is flopping around inside the housing and making that noise. Were you running around extensively in 4wd while on pavement perhaps? That's usually not enough to actually break things, but if something is old and already compromised, it could put it over the edge.
Inspecting could be as simple as listening to where the sound is coming from. Things definitely change with load, but it would be surprising that whatever is making that noise did not show up just spinning the tire in the air. When you spun things were the hubs locked? Both of them?
Are they now? What lockout mechanism are you running? Stock, or aftermarket? Maybe the hubs are not fully locked?
Speaking of the noise though, along with all that play you felt, you will be looking closely at the wheel bearings. Unless the spindle is broken, it's the bearings that keep things tight.
Is this disc or drum? And check your hubcaps too. I've heard hubcaps make that kind of noise.
Any suggestions on inspection of the differnential? Anything I need to be careful when taking out the axle or other seals ect which i should replace while I am in there?
Before removing all the outer stuff, just pull the front diff cover off and see what's going on inside. Rotate things (with the wheels if you can't turn the ring gear by hand) and see if anything is broken, missing a tooth, or loose to the touch.
That would be my first step with the diff, so you know where you stand in that regard. And it's a good thing if you've never changed the gear lube. Because now you will!
But don't put any back in just yet. You might be draining it again to do other stuff. The axle seals are all the way inside the tubes down at the differential. Yes you need to be slightly gentle when removing the axle shafts and maybe even rotate them slightly so that the splines don't drag across a seal. If they're worn, there may be sharp edges.
Same for putting them back in...
Were you leaving it in four-wheel drive for all this? Is the transfer case in 4wd too, or just the hubs locked? Maybe the hubs unlocked but t-case in 4wd?
Maybe it's just not quite shifted into gear, or the hubs not quite locked.
Be great if it's that simple, or just a flexing hubcap. No matter how unlikely, it would still be a nice lucky break.
Hey, it's cold out and the hubs have not been locked in a long time. Maybe they're gummed up and not locking. Would not be the first time.
So like so many other things, if you've never lubed/re-packed/adjusted the wheel bearings or cleaned the grease out of the hubs, it's far past time.
Good luck.
Paul