[f5fstop]

From what you are telling me, either your entire diff is gone, locking up the drivertrain and causing problems up the line to the t/case, trans, engine, etc. or else it is a problem in the t/case. Reason I say that is off the top of my sleepy (early, not enough coffee) head, I can not think of any problems like you mentioned that would be signaled by the rear diff.
The standard rear diff has no PCM monitored circuits, but the T/case, trans, etc. sure do.
A grinding from the rear would make it sound like a rear diff, but a grinding from the rear could be coming from the t/case (sound is weird when it travels). However, if the rear diff is totally trashed it could cause problems up the line to the other components.
Keep us informed as to what the dealer says. The other problem with the lapping compound would cause the diff to get louder and louder until it failed. The compound basically ate the gears over a period of time.