Dad26.......Wow.....that was alot of water you drained out.....glad to see you got it out. Looks like all the teeth on your gears are in great shape. Mine had some pretty bad chips, and I got all the chips and fine metal out with a magnet when I flushed it and put fresh oil in. With the level that high, Im surprised that you did not have some serious oil leaking out along the brake shoe seals.....so, those seals must still be in good shape.
Here is a pic of when I filled-up the rear-end with fresh oil: You can see the dipstick, and I think this is the correct full level.
Heres a pic showing the crud in the bottom......so, since you went this far, I would reccomend that you also drain out the old oil and then put the plug in and maybe add a couple gallons of diesel to slosh around and help get the debris out....then drain, and use a magnetic tipped pick-up tool to fetch any metal if its laying on the bottom:
Heres the cleaned diff., and ready for fresh oil:
And I believe this is the correct full level in the tranny, as it was taken after I had filled up the rear end with fresh fluid......and I "think" that the fluid had equalized the same in each since there are holes on the bottom that connect the two chambers: