Unfortunately looks like similar has happened to mine. Went to pull the axles to measure for disc conversion and could not pull drivers side axle. Pushed in a little but not enough to remove C-clip. I could see some of the mushrooming in the same area as your initial pics. Ran out of time to diagnose any further, will be looking into it further this weekend I hope.
Was running Lucas HD 85/140 dino since new, only about 2k miles on it, running ET Streets and not high power (270rwhp) but launching with clutch (M/T). Will try to get apart and update this weekend.