I'm putting back together my gearbox and I'm having a little bit of trouble. I can't remeber if the gear touched the final drive ring gear when I took it apart. The differential seems to be in place, but I am nevertheless having problems with the gear touching. You can hear them rubbing as it spins. The counter-shaft is seated correctly.

One thing I noticed is that when I put the counter-shaft in without the diff in, it sat all the way down onto the final-drive drive gear on the housing. However, when I put the diff in and reattempt, it does not get this low. I am assuming for this reason that the hang up is the differential. I've tried hammering it lower, but to no avail. I'm running out of ideas, here...

If it isn't supposed to, what the hell am I doing wrong? When I look into the hole for the vss, the ring gear is very close to the case as the last pic sort of shows.

Pics:

 

Problem ended up being that i had the ring gear on upside down, oops

 

good to hear you got everything fixed