A number of times people have reported that the banjo was too hot to lay there hand on it right after a differential rebuild. After several hundred miles it didn't get quite so hot.
What that tells me is the mechanic who put the rear end together did not properly set the preload on the carrier bearings. They mearly installed a nominal gasket on each side from the kit many suppliers provide instead of selecting thickness and quantity of gaskets to provide the proper preload. The bearings were probably way too tight, if not completely locked up. Henry's 40 horses broke it loose and caused the bearing mounting surface to "spin" on the hub and machine some metal off the hub. Then it ran free and much cooler. However, the bearing is partially turning on the mount, not on the bearing itself.
Just about every rear end I tear apart I find the bearing has spun on one or both hubs. If it is just one hub, it is usually the ring gear side, probably because it receives the initial torque there.
The repair is to have the hubs knurled, if there is enough metal left. Then the bearings can be pressed onto the hubs tight. A cut also has to be taken on the bearing stop to true it up and a shim added to make up for the lost metal.
Tom Endy