Talk about a hair puller. Trying to get the diff to function with the smaller balls was a nightmare. First I had to figure out why the thrust bearing assembly wasn't putting pressure on the diff, then I had to take a little material off of both the drive shaft and the bottom washer in the thrust bearing assembly. Maybe just grinding on the washer would have solved the problem but I did the drive shaft first. If the shoulder on the thrust bolt were machined back just another mm it would accept both 1/8 and 3/32 ball diffs.

Works now though and I'll get to run the gear ratio that I need to.