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There is a thing called "axle Shaft thrust block" group 12.0194, part 446138. The shop manual states that it can move and cause a problem. It is located in the differential carrier. The carrier was removed and the block investigated. It is a multisided block with two bright shiny surfaces likely caused by contact with axle shaft ends. Made sure these surfaces were aligned with axle shifts and replaced carrier. Verified correct placement by shining flashlight down axle tube. Saw clean reflective surface. Put back axle shafts backing plate, brake assembly , and drum. Hand tightened nut. Wheel still as before; shoes contacting drum.

Do you have both backing plates installed and tightened down? What is your end play? Rap each axle end with a block of wood and a heavy hammer--the bearing outer races must be touching the backing plates. Any chance your shims hold the bearing races away from the backing plates?

Thanks for comments and suggestions. Yes both backing plates were torqued to 30 foot pounds. Rapping against a wood block with a heavy hammer did nothing. Your comment about the bearing races touching the backing plate could be most helpful. After receiving your response, removed both backing plates,( getting pretty good at this), and took a picture of the driver's side. Note : shims holding backing plate away from bearing race. This could be most licking the major cause of my problem. I feel almost certain that the shims were as shown when the unit was disabled but sometimes memory fails me. At this time there appears to be no end play. There is one more thing I feel that needs to be checked. It may of the thrust block are reversed and is affecting the axle end play.

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As they say, a picture is worth 100 words - incorrect assembly. It's not the shims that are preventing the bearing race from contacting the backing plate (the hole in the shim center is larger than the bearing race), it's that the bearing race is not properly seated against the backing plate. As Ross indicated, the bearing race must be up snugly against the backing plate, both sides. Only then you can measure the axle shaft end play and adjust with shims between the backing plate and the shaft housing as needed, always being sure if you add shims that you re-seat the bearing race back against the backing plate. In the case of your picture, setting the bearing race against the backing plate (and corresponding adjustment of total end play) will result in the brake drum being further outboard than it was before and should eliminate your shoe/drum interference issue. Pretty basic stuff - I don't know about the 55 shop manual but all the other manuals going well back to prewar describe this process quite well - once you grasp the concept of the end play adjustment it's really simple.

When installing an outer rear wheel bearing race, I recommend you DO NOT install them so they are flush with (or even deeper than the) end of the housing - leave them with a bit protruding and use the force of the installation of the backing plate to push them whatever further distance is required as determined by whatever shims are present - thus you maintain contact with the race and the backing plate and then check/adjust the total end play. Thus there is no need to "whack" the far side axle end to seat the bearing race on the opposite side unless you add additional shims.

Thanks for the feedback and suggestions. Did insure that the bearing race was even with the 3 shims on the left side and no shims on the right side and firmly in contact with the backing plate. Still incurring interference.
Pulled everything back out. Reassembled without shims to check end play on the left side. Found it to be h040". Checked thickness of shims , 3 @ .020 each or .o6o" total.
Zero end play on right side.
How important is the relationship of the stop block face to the axle end? May be need to rotate block 180 degrees?
This is beginning to get a little bit aggregating

The stop block floats so there is no right or wrong way. Something is awry in that you have different end plays: The two axles push against each other through the stop block so they will ALWAYS have the exact same end play unless something is interfering--like the axle inner seal is not pushed in all the way or the stop block is pushed all the way to the end of its small travel.

If you have .040" on one side that tells me you need to remove two of those .020" shims just to begin with--end play is reduced by removing shims--and then measure again.

happy, I'm guessing that despite Ross' and my explanations of the rear axle end play you still don't quite get the concept and method . If I'm correct and if you wish, PM me with your phone number and a good time to call and I'll see if we can't get you a better understanding over the phone.

Thanks for the offer. I will take you up on it. First, a new inner seal has been ordered for the right side. After reading Ross' comments, I looked closely at the seal and found it not properly seated and cocked tight and possibly interfering with the correct positioning of the bearing. It is supposed to be in town tomorrow morning.
In the mean time I'll have to learn how to PM.

Not quite so: "Happy"