1985 Monte Carlo SS known as Barney

[Vegas69]

You aren't going to like it but that is most of your movement and what's causing your leak. I went through the same thing on my car. I changed from a roller to a tapered as that's what is recommended for any performance application. A tapered bearing keeps the axle in a more fixed position.

I'd space it out another 1/8 and see if it leaks again or begins to rub. If it does, this is where I'd go.