Thanks wammers thats what I wanted to know. I was not ignoring the VCU, more concentrating on the job in hand. The diff was not connected to the transfer box so obviously there was another problem; which turned out to be the pinion bearing. (thanks again to wammers for suggesting I check it).
The reason for failure may well be the VCU. If not then it was the lack of oil. Ether way the next job is to check the VCU and source some oil seals that actually fit.
One more thing though; are all models supposed to have a mass damper on the front? Mine doesn't have one.