I found that my right side differential bearing assembly had 1/8" of end play in it. Removed it and drained diff oil, and found copper colored particles and shavings thruout. They are non-magnetic, and I can't figure out where it all came from. Obviously a bearing failed in the output assembly, but I can't figure out where the copper came from. I thought it might be a failed speed sensor, but it's in one piece. The powerlok clutch plates appear to be steel in rebuild videos I've watched. Does anyone have a clue where this copper could come from? Here's a picture of the diff fluid I drained out.
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Only guessing, but I think it must be debris from the clutch plates and spacers in the LSD, which must have taken a beating with that amount of play in the output.

 

I've rebuilt a differential, and I can't think of anywhere internal where there are non ferrous metals. The shims in the hubs can be bronze (earlier ones were steel) but nothing inside the differential itself should be copper. You're right, the clutch plates are steel. I can't think of any bushings inside either.

 

I'll follow up later, but i think i know the source of the copper. When i got the diff, the mounting ears were broken on the speed sensor. I pulled it out, and the interior portion was broken. The diff had been shipped to me with no oil in it. I took off the back cover of the diff, and pulled out what i thought were all of the pieces of the speed sensor. Obviously, I was wrong. I'd forgotten until today that I'd done that months ago. The copper is likely from the very fine wire that is in the sensor. There are typically hundreds of feet of that wire inside. It's as fine or finer than a hair.I'm going to pull the rear cover back off and clean things out, then flush out as much as I can with WD40 and thin oil. I'm not worried too much about any copper that may remain since it is so soft. I'll do a couple of diff oil changes after some driving.I don't think there is any relation between the output bearing assembly and the copper, just coincidence.