rear axle bearing on a 77

[jiggen01]

pulled the axle because the bearing was bad but i think ive run into some issues, is there a race that rides inside the rear end housing, if not the housing is chewed up where the bearing rides, where do i go from here, is the housing junk or is there a way to fix it

 

[73azbronco]

Pics? How chewed up?