I am replacing my open diff with a wavetrac one in my 2000 LS. After pressing on the bearings and slipping it into the case I find that final gear sticks a little out. This then grinds on the gear set. there is no spacer on the bottom of the case, and the stock honda bearings are pressed on all the way. any one have an idea to look at to solve this?

 

There is only one diff spacer shim used in the top case on the LS trans. Try closing the cases with only the diff and top diff shim installed (no shafts). See if it spins freely with a few bolts tightened down. If it locks up, you probably have the wrong bearings or shim installed. The countershaft will lift up when you lock the bearing in the clip so it should not rub the ring gear when you have it all together.