The Bugeye originally had a 4.22 rear differential and we replaced it with a later MG Midget 3.99 differential. Though it performed quite well (smooth and quiet) and it did a nice job of reducing engine rpms at cruising speeds, it did result in a sacrifice of low end pick up. So, we determined to switch the diffs again and revert to the 4.22.
This would be an easier task if we still had drum brakes because one can pull the axle half shafts without disturbing the brakes. Unfortunately, with the disc brakes in place, pulling the axle half shafts requires removing the calipers and disc rotors. No big deal, just a little extra work!
This job requires getting the car up on jack stands which has become a rather complicated process. We began by using the original (restored) Sprite jack to lift one side of the car. This enables you to get the floor jack under the fuel tank and under the rear differential. Otherwise the fuel tank is too low to permit jack access. Once the rear of the car is raised with floor jack, jack stands can be inserted under the spring perches. One can then move the floor jack to the front of the car and with a 22″ wide piece of 2 x 4 lumber located behind the sway bar, lift the front of the car and place it on jack stands.

Front of car on Jack Stands with 22″ 2×4
We then returned to the rear of the car with the floor jack and lifted the car a bit higher and replaced the smaller jack stands with larger and taller stands. After all that effort we were then ready to get to work.
Bugeye Restoration Video Episode One Hundred-Eighteen covers the process of getting the car up in the air and switching out the differentials.
Once again we used Permatex Gear Oil Gasket Maker to seal the differential pumpkin to the axle housing along with a new paper gasket.

Permatex Gear Oil Gasket Maker
We used Blue Hylomar Universal sealant between the hubs and the axle half shafts along with new paper gaskets. We reused the rubber “O”ring seals that had been on the car. This sealant remains pliable and never hardens.

Blue Hylomar Universal Sealant
With everything buttoned up, the wheels mounted on the car, and the car back on the garage floor we took her out for a test drive and the increased low end did put a smile on the face!
Bugeye Restoration Video Episode One Hundred-Eighteen:
https://vimeo.com/1122986589/dc684501de?share=copy
The timeline for the video contents:
0:00 – Putting the car on jack stands
0:15 – Using the original Sprite jack to lift one side of the car
0:24 – Using the floor jack to place the rear jack stands
0:55 – Jacking up the front of the car
1:52 – Disconnecting the handbrake rods
2:35 – Removing the calipers
3:18 – Remove brake pad spring clips
3:30 – Remove rotor disc
3:45 – Remove axle half shaft
4:35 – Clean axle hub
4:42 – Caliper piston retracted
5:18 – Remove 3.99 rear differential
5:45 – 4.22 differential installed
6:12 – Propshaft reinstalled
6:25 – Axle brake union reattached to the differential flange
6:35 – Axle hub/half shaft gaskets and sealant
6:50 – Half shaft installed
7:07 – Brake Rotor installed
7:32 – Brake pad spring clips installed
7:47 – Brake pads installed
7:55 – Brake caliper piston retracted
8:57 – Caliper installed and handbrake rods re-connected
9:01 – Differential filled with GL4 80W-90 gear oil
Oil Leak!!
Unfortunately, the next morning we discovered differential oil on the garage floor. Upon further investigation we determined that the pinion seal was leaking. Before we mounted the 4.22 diff, We had added oil to the 4.22 differential on the workbench to see if the pinion seal leaked and even after leaving it overnight we had no leaks. However, driving the car must have warmed the oil and resulted in a leak.
We had a new pinion seal on hand so we set about the process of pulling the old seal and replacing it with the new. The following is a checklist we put together summarizing the work required:
Drain the oil from the diff housing
Put wheel chocks behind the wheels and apply the handbrake.
Disconnect the prop shaft.
Mark the propeller shaft and the pinion driving flanges so that they may be replaced in the same relative position. Use a chisel or scribe.
Count the number of exposed screw threads beyond the nut on the pinion.
Unscrew the nut in the centre of the driving flange. It is typically on very tight so expect to use a long extension on a breaking bar or an air gun. Remove the nut and washer and withdraw the flange and pressed-on end cover from the pinion shaft. The flange may need to be tapped with a soft hammer to remove it from the splines.
Extract the oil seal from the casing. Drive a self tapping screw into the seal and then use the claw of a hammer to retract the old seal.
Press a new oil seal into the casing with the edge of the sealing ring facing inwards (flat to the outside). Smear the outside edge of the seal with grease or oil.
Replace the driving flange end cover, taking care not to damage the edge of the oil seal. Tighten the nut with a torque wrench to a reading of 140 lb. ft. (19·36 kg. m.) . Instead of the 140 ft. lbs., we tightened the nut sufficiently to align our marks scribed on the pinion and the nut.
Reconnect the propeller shaft, taking care to fit the two flanges with the locating marks in alignment.
Refill the axle with gear oil.
Holding the differential flange in a stationary position to either loosen or tighten the pinion nut proved to be the only really challenging part of the job. To remove the nut, locking down the flange with two ratchet straps worked well enough.

Ratchet straps holding the pinion flange
However, to torque the nut we had to turn to friend Randy Forbes who fabricated a tool for us that worked exceptionally well.

Randy Forbes Custom Tool
The tool and the entire process is shown in Bugeye Restoration Video Episode One Hundred-Twenty.
This is the old and leaking pinion seal:

Pinion Seal Exposed
After completing reassembly, we took the Bugeye for another test drive and let the car sit overnight. We were pleased to discover no oil leaks! Another job complete.
Bugeye Restoration Video Episode One Hundred-Twenty:
https://vimeo.com/1124639344/1c4220d11c?share=copy