Not much to expand on. The above was caused by a pinion bearing failure. Likely the inner. Typically you have bearing failure from lack of lube (this was a front SA diff). Also you can run into this situation setting up a new diff depending on ratio/pinion depth. There really isnt much room between the pinion head and carrier as it is.
As far as the crush collar goes, ive never ever oulled one that came out square. A property set up SS diff, you could theoretically run the pinion nut to a billion pounds and not have an issue. Crush collar is a super fine line to proper setup. Also there are plenty of people who think its ok to do a pinion seal on a CC diff without replacing the spacer to reachieve proper bearing preload
Hopefully that answers your questions
