TR4 Toyota Transmission swap staring

I'm cleaning up the underside of the car in preparation to bolt up a 1985 Toyota Celica transmission to the Engine of my TR4.   IT should be fun.

While cleaning I saw something puzzleing that may explain a clunk I get while turning corners sometimes.  It looks like my axle may be separating from my differential case.  this is a view from the drivers side rear of the wheels looking in at the diff.  I'm hoping that paint did not adhere there or it was never painted as its difficult to get paint in to corners with spray.