Way too much pinion shim.
Go down to around .030-.032" and try again.
It helps if you know what the factory pinion shim thickness was for the gear set you took out....it gives you a starting place for the new set.
People think of gear set up as shimming the gearset to the housing....when the reality is the gearset is made with a tighter tolerance than the housing is, what you are really doing is "backfitting" the housing to the gearset. That is why the original pinion shim from the original gearset in that housing is most likely to be within about .003"± of being correct. And it is typically around the .030" thickness range....I've never seen one need below .024" nor above .036".....not to say that there might be some hpoousings that need wider out there, but it can't be very common, I've been in more than 2 dozen 8.5"s and not seen a wide shimmed set yet. Same for 12 bolt, 7.5", 8.2" and even 8.8" Ford or Dana 60
Go down to around .030-.032" and try again.
It helps if you know what the factory pinion shim thickness was for the gear set you took out....it gives you a starting place for the new set.
People think of gear set up as shimming the gearset to the housing....when the reality is the gearset is made with a tighter tolerance than the housing is, what you are really doing is "backfitting" the housing to the gearset. That is why the original pinion shim from the original gearset in that housing is most likely to be within about .003"± of being correct. And it is typically around the .030" thickness range....I've never seen one need below .024" nor above .036".....not to say that there might be some hpoousings that need wider out there, but it can't be very common, I've been in more than 2 dozen 8.5"s and not seen a wide shimmed set yet. Same for 12 bolt, 7.5", 8.2" and even 8.8" Ford or Dana 60