The spring mounts have cracked where they mount to the axle. Both sides have cracked. I was thinking I could get it welded but the dealer says otherwise. He also said the gears and stuff may be messed up since it has been leaking. How good would the weld hold up if I did that? I don't go 4x4ing so I wouldn't have to worry about that part. I was thinking if I were to replace the whole thing since the inards might be messed up that I would go with a newer axle since they have disc brakes. Would I be able to easily put a new one on? I would like to get this info ASAP please.

 

If it was me I would go salvage yard hopping for a disc brake rear end. I don't think anything has changed. Should be just an easy swap (relatively easy, consider what's being done). You'd probably need to make sure you got the proportioning valve too though, or get a new one. Again, I don't know for sure, but that's the route I would explore, and try for...

BTW, just wanted to say, "Hell, yeah! That's what a truck is supposed to look like!"

 

If you mean the spring pads attached to the axle that the leaves rest on have cracked off of the axle tube then welding them back on would be just as strong or stronger than factory. Grind off the old welds and if the pads aren't rusted bad then weld them up.
I don't know why the gears/bearings would be bad just because it has been leaking. I would pull the cover and check it first before I condemned the whole assembly. If you really just want discs real bad then do the swap. IMO from what you've described I don't see a reason to swap it all out.

 

I'll try getting them welded first. I'll clean it up and take a pic to see if it possible to do that first. I'll also pull the cover. Do you think it would be possible to get them welded while installed though?

closer9:
I just wish I had the 5.4 though. Either that or a manual tranny. I drove a 2003 that is exactly the same as mine but different color and it had the 5.4. It was much better. I also wish I had the newer front end.

Edit: The dealer also told me that is the reason the truck vibrates at lower speeds.

 

Here's some pics. That can't be welded.
Before:


After:

 

Also got another question. I am looking at fordpartsonline.com for a housing. They have a couple different ones. I know it is 8.8. One says locking and the other says non-locking. What is the difference? The locking one is about $300 cheaper. What would I need besides seals to swap stuff over? I am also going to try to find something at the yard.

 

Ouch. If you buy just the housing then the gears and bearing preload need to be redone which is difficult and unless experienced would need to be done at a shop. If you took your carrier and gears out of yours and brought them with the new housing to a shop it will probably cost you between $50.00-&100.00 to have them set them up for you. Then you could install the axles and brakes. Are there any axle assemblies drum to drum in your local classifieds or Traderonline.com. The whole assembly might be a better deal.