The issue has been resolved. I did change the axle shafts for a known good pair and no more leaking. Thanks for the help.
I run a '56 Chevy (different than '57, but close) rear axle asm. on my Stude truck... Had a leak that continued after new bearings and seals were installed. Turns out the housing had a hairline crack near the backing plate flange right at the weld seam. I replaced the housing and it's good now.
I just spent today cleaning up a '57 rear I picked up at a swap meet years ago, in parts. Looks like '58 -'64 bearings. "No worries, we'll just keep on tightening the bearing retainer". They must have beaten the **** out of the axles to get them out. Splines on the axle are OK, but I'll have to true up the flanges when I replace the bearings. Are there differences in axles year to year? I hope they are '57 axles. Glad I found this thread!
We used to put 3 small tack welds on these axle as well as the other cars with a press on retainer ring so they wouldn't come out of the bearing on circle track racing back in the day. Also To pull the axle put a chain on 2 or 3 lugs and run the chain around a piece of pipe - wood post-- and put a piece of wood --4x4 on floor between bottom of post and your jack stand -- chain should be level from axle to pipe- post and give chain a little slack and jerk top of post-pipe out-- another old trick. Do this at your own risk
Danchuk can supply any parts you need. They also have videos to describe the proper procedures for dis-***embly & ***embly of these components. That retainer is best removed by breaking it with a sharp cold chisel and a B.F.H.. When done correctly you can count on it all to hold up real well under normal driving conditions. Heating the axle (or welding on it) is risky because that can alter the temper of the steel. It's one thing to break an axle on an enclosed track & quite another on a twisty canyon road. You guys have some pretty awesome twisty roads over there... The difference between '55/'56 from '57 rear ends can be told by the O.D of the bearing. The '57 is bigger. I'd check that axle to be sure it's not bent.