Still fighting this. It is like there may be some build up on the axle not letting it slide through the gear enough to allow the "C" clip to slide off. I have tried using a large common screw driver to slide in the "C" clip grove and force it inward but still no luck. The "C" clip does spin on the axel freely and axle turns with no problem but the "C" clip just won't come off.

I guess this is the fun part of old trucks right?