Need help with rearend again plz

Ok finely got around to taking rearend apart not to many problems after 2cans of wd 40 lol got rearend out took it apart and pinon gear is shot but all bearings seem fine so why would that happen? Also not 1st time its been done other owner drilled holes in the ring bearing case? Holder? Not sure what call it but its got few drilled holes is that gonna be a problem? I heard people done it b4 just wondering if I need buy new rear case also I know the pinon gear has come out I got square tubeing as my tool but idk how get the seal out that’s covering the lock nut that holds pinon in I got pics I took a round spring off and a round metel cover thing off it was just seeing on there and there’s a piece of metel in the seal is that a clamp ring I couldn’t get it off any help plz and thank you