I tried to upload a sound, but couldnt figure it out. I am almost postive it is the rear pinion bearing. The noise gets louder and higher the faster you go. I looked underneath and the seal is shot, it is throwing gear oil on the underside of the jeep now,, ugh,,,

I found a used D35 with less than 100,000 miles on it for $250. I might attempt the swap.

 

On Friday my jeep experienced what you are describing I pulled the rear end apart and it was my outer pinion bearing that was causing the noise so I replaced both pinion bearings

 

Was that a difficult repair? I have read on here that you have to be carefull with crush sleeves and shims,, it seems a little intimidating to me.

 

Its not to bad I replaced the crush sleeve and I marked everything. If you pay attention to how it comes apart its not bad. I have rebuilt rear end before but if you know cars and are careful I'm sure you can do it.

 

There was a post recently called " step-by-step guide to Dana35 pinion bearing replacement" that should be a good thing to review. Also, I would like to remind you to check the yoke for wear at the seal area. If it is grooved, the new seal won't seal and will leak.