Truckdoug, I pulled the extension housing and this is what I got. Struck out on this one.

 

You could use a "Counter-Bored" Slip-Yoke on that Output-Shaft.

Or you can turn-down the thicker-diameter area (where the O-Ring is) on a lathe to a diameter smaller than the splined section.
Don't remove too much/ make it too small in diameter as this will weaken the shaft.

 

make sure your tool is sharp! that sucker is made of some tough stuff

 

Thanks for the input fellas. I have a fully splined slip yoke style output shaft on the way.

Any recommendations for a rebuild kit? I will more than likely upgrade the input shaft while I'm there.