John, when you replaced the water pump, I'm guessing that you did not replace the rear housing. If you did not, the old one was probably stripped out already by the previos owner over torquing it. This is not uncommon. It's best to just replace that part with a new one, or get the one from MX.

99 Gen 2.5, fixing blown head gasket
89 SWB- 33's, ARB Front locker, SR rear locker/axle, SR F brakes, winch, WST Offroad Armor all Around, 2.85 Aussie T-case Gears (SOLD)
Sold: (2) 95 SR's, 86 SWB, 90LWB, 91 LWB
-Can Change a timing belt in my sleep..