I'd take a look at the wedges on the axle and see if they're cast onto the housing or are welded to the housing.

Mine were welded on, so I just blew them off with a torch and the axle was fine.

After that, you have any option available to you. I went leaf spring. But will probably change that up in a couple of years of wheeling like she is now. I'll eventually link the front and rear. But she'll be more Xtruggy at that point than Xterra.