Took it to Shop 2 who put it on the lift. We both looked @ it and the axle looks fine. unfortunately the $*#$(#$ diff to axle seal is leaking.

Estimate is $300. I am going to shop around and see if I can get it done cheaper. I feel like the bad seal might be Shop 2's fault, but it has been too long (over a year) to reasonably expect them to fix it for free.