I've had my best success eliminating driveshaft vibrations by getting the tail shaft of the trans parallel to the pinion yoke of the rear end. This lets both U-joints operate at exactly the same speed. It doesn't really matter which goes up and which goes down, just make sure they are both parallel to each other.

My trans points 3.5* down and I have my pinion pointing 3.5* up and she's smooth as butter...

Trey, I'm inclined to believe that it has something to do with the roughness that your feeling as you turn the pinion. You used a new crush sleeve, I'm sure. When you reached the inch Lb. measurement, and it was a tick too much, did you back it off any?
How many inch lbs. did it take to turn the pinion with a socket on the pinion nut? You have to check that number BEFORE you put the carrier back in...your checking pinion preload only, and the carrier/ring gear will throw this number way off.
It sounds like you have too much preload on the pinion, with the roughness your describing. I hate to say it, but you'll probably end up setting the pinion up again, which is a pain. Hopefully I'm wrong.
I have another one to do for my nephew. He just bought a 3.90 gear set for his silverado.

I FIXED IT!!!!!!! It was so simple too. I can't believe I missed it multiple times. Oh well, such is life. The one u-joint strap was not holding the cap fully. As I mentioned earlier, I replaced the rear u-joint due to it having a little bit more play than I thought was correct. Turns out that play was the cap moving and I just didn't see it. I noticed it this time though. I took both straps out cleaned them and filed the flats down so that I was certain no burrs or slight deformation would keep it from bolting down fully. I put everything back and the play was greatly minimized because the cap was no longer moving. Took the car out and there's nothing but smoothness.

I'm still planning on a new driveshaft as I need about a 3/4 inch longer shaft. I'll do it when I do the transmission and engine later this year.

This was such a battle and pain in my ass that it really had me questioning if I should be doing anything related to cars aside from drive them. Now I can finally move on to all the other things I need to address on this car.

Thank you all for the replies and suggestions.

Scott, to answer your questions. Yes, new sleeve. I'm going from memory but I want to say 25-26 in lbs to rotate pinion. I do remember it was 3-4 in lbs over. Only pinion was in place. No carrier. I didn't back it off any. Pinion rotates smoothly by hand.

I posted the 3 in lb question over on NastyZ28 as well. There's a gentleman that posts regularly, Big Gear Head, that sets up lots of rearends. He really knows his stuff. His replies helped me rule out that being the issue. Still not sure why it's making the noises though. It could be the TruTrac or simply the gears running through the oil. It was very interesting to listen the gears and carrier rotate without the axles in place. The gears churning up the oil is rather loud inside there.

I'm now sitting about 2.5* +/- 0.5* transmission down and pinion up now. I'm still a little concerned about the delta at each joint but it doesn't seem to be affecting anything now that I've got the vibration fixed. Thank you, Lance.

I love simple fixes! You should make a Burnt mountain run, and bring it by!

Woo Hoo! I hate stupid crap that can drive you crazy like that but we've all been there done that before and can all empathize... Feels good to figure it out though right?

I plan to once the weather cools off a little more, Scott. No AC currently, and I'm busy on weekends for a while. I intend to get up that way soon though. I still need to see your Chevelle too.

It does feel good, Lance. I was really starting to pull my hair out over this.

Thanks!