What your trying to do is tighten down the pinion nut just like a wheel bearing. Keep tightening until there is no play in pinion and pinion spins with minor resistance.

 

The new crush sleeve is on and I have the pinion nut torqued to 160 ft. pounds. The preload is within spec and everything feels tight and smooth except that I can move the yoke/pinion gear (obviously all now one piece since it's been bolted together) away from the diff housing 1/32-1/16". I don't know if this is allowable or if should try to tighten the nut further. I understand what sdmartin65 is saying about not having play but at the same time, it seems I have followed the instructions in both the Yukon paperwork and the Haynes manual. Not sure if I should continue reinstalling everything or if I need to tighten more.

 

Well, I checked everything after doing the pinion gear with the crush sleeve. I had to adjust the carrier shims as the backlash was too low.. 0.007. After adjusting the shims, I got the backlash to .014. This was within the recommended specs from Yukon. I checked the gear pattern again and thought it looked okay but after putting everything back together and putting fluid in, I have a roar that starts up around 40mph so something isn't right. I will drain the fluid tomorrow afternoon and go back to the drawing board. Any advice will be appreciated

 

So I started over though this time, with the diff pulled out from the truck and on a stand. That made things much easier. How do these patterns look?

 

Hard to see, really. I'm sure you've looked up the patterns from yukon gear and the like. There's a product most will use called "prussian blue". You put that on your pinion and easily see the mark on your ring gear.
Mostly I think you want to get it in the center of the gear, where it's strongest, not too tight since you're allowing for heat expansion, but with lots of gear contacting.
Once you get the pinion depth just right, you have to set the backlash with the carrier shims. There needs to be a little play there, but not so much that you get a major clunk. I think you need to use a dial indicator there unless you've done so many that you can set them just right by eye.

 

Are these pictures better?