I'm pretty sure the diff is bad but to confirm, worn u-joints and bad wheel bearings won't make this type of whine?

Sounds like straight cut gears.

The whine will happen every time I let off the gas pedal and coast in gear or neutral.

 

I'd guess bad rear end. Seems to loud to be the tranny.

 

The sound comes directly behind me. Didn't have any issues before I swapped in the 1.8 diff.

 

Sounds like you need to adjust the backlash, if it's only on decal.

 

I'll probably tear the diff apart this weekend and see what the backlash is set at. The diff is from a '95 but I have '99 FSM, pretty sure the acceptable values for the diff should be the same, no?

 

sounds similar to mine when i killed it due to no oil...which then killed the trans from all the extra load...

 

How long were you driving with the bad diff?

 

drove about 200 miles.