Some of the 2 ton used a snap ring on the outer wheel bearing for the cup to bottom against. A 2 1/2 probably would not have this snap ring. The cup merely bottoms against the hub. I have never known the inside bearing to have a snap ring. I also don't understand your description of the inner bearing. It looks just like the outer bearing, only larger. The cage may have broken and part of the cone stuck to the axle housing. When bearings fail, they spin on the housing and generate heat. This may have been your problem. Can you post a picture of what you have.
