Top sector shaft bearing mystery solved !
OK,
First thanks for the link, Ben - one of your pics shows me how far I need to tap in the top sector shaft bearing (leave it just a little below the surface of the housing). Your teflon ring boiling trick will also be useful - thanks again.
But Ben... why are you flipping me off in that first pic?

And that is one cool 2006 vintage flip phone in those pics too...
Here's a link to another Saginaw box rebuild on Pirate - lots of pics:
http://www.pirate4x4.com/forum/showthread.php?t=570869
Now (so hopefully someone can find this in a search) THE TOP SECTOR SHAFT BEARING COMES OUT OF THE TOP OF THE BOX. There was a bunch of corrosion/peen over mental at the top of the sector bore that made me think the bearing had to driven DOWN - but it must come of the TOP of the box !
I was able to get a friends porting tool/rasp down into the bore and carefully cut a slot in the outer bearing race - then pry the remains out. That clearly showed that there was a bearing pocket in the housing. So again - the bottom sector needle bearing taps in from the bottom. And the top sector bearing taps in from the top.
Now I just gotta drill and tap the box for a ram and use all these web instructions to re-assemble it.