Hi
What are you using to fit the circlips ? It's very important that you use he correct tool to avoid straining the clip. I would advise checking the groove in the outdrive where the circlip locates for burrs or defects. You also need to identify the difference between the flat and slightly rounded side of the circlip. The flat side needs to be fitted so it is closest to the part of the outdrive where the diff ring is mounted. I would also suggest that you fit ceramic diff balls while you're at it. Hope this helps
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