[flyingtim01]

What obijuan said, thats pinion damage to the carrier. I'd say it warrants a thorough looking over. That may be old damage that has since been repaired, but if you found it with no gear oil in it and you have a suspicious chatter, its time to take a look. The pinion bearing may have failed due to lack of oil and now it's sloppy, allowing the pinion to contact the carrier, causing your chatter. Of course, it may have been repaired, if you didn't find any metal in the remaining oil, and the chatter is your clutch going out or needing adjustment.

If that rear is no good, you may want to think about stepping up to a 12 bolt, or a Dana 60 rear for that truck, if you plan on running 35s. Depending on how you drive it and how healthy the 350 is, a 10 bolt might not last too long if there is any amount of tire spin involved. You could probably find a 12 bolt in good shape at a wrecking yard for what you'd be into that axle for with new gears and bearings and paying to have them installed (and hoping the shop knows what they're doing) and at the end of it all having an axle with a compromised carrier just begging to crack the first time you're stuck in the mud or snow.