Rear axle keyway problem

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"Rear brake drum retainer" seems to be a V8 thing.

Nope, not V8 thing, but an (original) 'banjo' rear end thing. Cheap insurance down the road. You could also have specialty axle company redo the original banjo rear end to have modern type axles installed.
 
Use a hardened washer under the nut so it won't dish and loosen the nut. Tighten the nut with a long breaker bar and a 6 point socket.

Hello,
My axel washers with the felt axel seal would always cup and the torque of 125 ft. lbs. was lost.
I got a machine bushing, 5/8" x 1" x 14 ga. and a hardened flat washer 5/8". The machine bushing is an exact size replacement for the felt seal and now it supports the flat washer and it doesn't cup any more.
At Lowe's, 2 in a pack.
Al
 
A friend is repairing a badly worn axle and there is a monster chip out of the keyway due presumably from running with a loose axle nut.
Anyway he wants to weld the chip back in and I think the heat would badly weaken the heat treatment. I suggested he just JBWeld the chip back in place and make an oversize key to fit.
And suggestions or is it a lost cause??
See attached pix of the axle taper.

I agree with most replies to replace and be safe/sure.

I would only add that (maybe) a lot of people do not realize that that KEY is not what should be depended upon to hold an axle in proper relation to the drum hub ! Especially, if you do not lap the hub to the axle taper, make sure to check the nut 'tightness'/torque from time/time. The picture shown here in this thread, IS what to expect...sooner/later...if the rear axle nut is not torqued adequately. Torque it or loose it :) !!
 
I lost a wheel once on a 1960's car. The rear end goes up in the air as the wheel exits and you lose steering. I was headed for a large tree with lots of battle scars ...
 
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