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Locking Differential in 1992 740T - Take-up slack 700 1992

My car came to me (3rd hand) with quite a few problems. (Only 110k, too, though the PO didn't believe in oil or filter changes, etc. Amazing what a high-priced detailing can hide, and fool even an old-time mechanic).
One of the hardest problems to diagnose was take-up slack.
The consensus from those who should know was: bad motor mounts, bad front suspension rubber, transmission mount, rear suspension rubber, etc. Some of these were worth replacing, and were.
None made any difference in the take-up slack.
While replacing the engine with a '94 940T, I noticed that with the rear brakes on there was very noticable rotational play in the drive shaft. Shocked!
Now the main question: how much rotation is normal, and before failure of some component, and is this a DIY project? Clutch pack bad?
The only numbers found, not counting the long UPC codes, are P121648 ? and the rear axle ratio 3:73.
If this is really serious, can another normal rear axle be used? I've read that the speedometer will be seriously useless if a normal axle is substituted, (on the Turbobricks forum.)
(The locker sure was great on the icy hills this past winter).
Please enlighten!
Many thanks,
wk






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