The setscrews are installed deep enough to bottom out against the pinion bearing race- - - - -I believe there are dimples in the race, or possibly a groove for them to bottom out into and prevent the race from sliding back and forth. Ignore whatever depth the screws had before- - - -bottom them out with the lock nuts backed off, make sure the bearing race can't move, and then tighten the lock nuts. As soon as you went from "pull" to "coast", the pinion gear, bearing, and driveshaft were pulled backwards to contact the ring gear carrier. I'd strongly recommend a full teardown, inspection, and cleanup of any debris that might have been created by the gear/carrier contact.
Jerry
