Will a 8.5 ring and pinion fit in a 7.625 axle housing
 

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I have a 2000 4 door ls it’s my baby the ring and pinion let’s just say pinion is practically smooth will a 8.5 inch ring and pinion fit in the same housing I recently lost my job and I’m trying to start my own business and that’s my only ride and is going to be my poster child for my business please help I’m needing to go as cheap as possible right now and I can find 8.5 rears that I can just have

I'm not expert, but I'm gonna go with no.

Go to a junk yard, match up rpo codes to ensure the right ratio, and pull one there. Or just swap the whole rear

I’m not worried about ratio it’s not a 4 wheel drive anymore

Yeah, but it'll throw off the transmission shift points and speedometer if you change it

Oh gotcha

Also swapping out the internals isn't as simple as just unbolting and slapping new parts in, pinion has a crush/thrust washer that needs to be torqued in, The carrier needs to be shimmed into the diff housing to set the contact/wear ratio for the ring and pinion and side bearing torque set.
Your cheapest and best bet is check rpo codes and swap the whole diff.

I’m just going with swapping the ring and pinion gears and weld the spider gears and honestly I can’t afford that

My advice is NO esp welding the spider gears, You think your broke now wait tell things start exploding ...
Even swapping the ring and pinion they still need to be set up and adjusted.
Welding the spiders maybe fine for a drag car that never turns and just goes in a straight line but don't work well for a street car .......

Here’s the thing I’m jobless right now and the only income I have is what my gf makes working part time I’m trying to get another job but can’t until it’s fixed im a diesel technician just fell upon hard times for a bit I’m doing short term and as cheap as possible

Do NOT weld the spiders on anything you're gonna drive on the street.

How familiar are you with setting up a differential? An r&p swap isn't exactly a bolt it deal