you may need to replace the whole rear end, then keep the axles and carrier assembly, drums etc, from spare parts or sell them, sound like the housing is rusting through, if the housing is still beefy, I would wire brush it, ( if any of the brushings stuff goes inside drain the gear oil and refill new ) make a patch out of thin metal and make a bond using JB WELD, the area must be clean for the bolding JB WELD after you have the patch bonded to the housing and it's dry I would use undercoating so the patch will not rust.hope this helps