The 7 1/4 rear end will have axle tubes that narrow before they enter the differential housing, and will also have a more squared off cover (sort of an octagonal shape) wherease the 8 1/4 rear has axle tubes that stay the same diameter from end to end and have a round cover. Grab the speedometer gear out of the car while you're at it. When doing this swap keep in mind that the 8 1/4 is about an inch longer then the 7 1/4, so either the driveshaft will have to be shortened or if you got the rear out of another m-body that has the same transmission as yours use it.
To do this swap you'll need a big floor jack, 2 safety stands, socket set, wrench set, scraper, rags, drain pan, and a breaker bar. A hacksaw may also be needed, or a grinder/cut off tool or impact wrench if available.
REMOVAL
-Raise the rear of the car and place jack stands under the frame. Remove
the rear wheels, and also the driveshaft (held on by 4 bolts at the rear).
-If the brake lines on the rear are in good shape remove the axle shafts
and the backing plates from each side, being carefull not to get grease
on the brake shoes. YOU DO NOT HAVE TO DISCCONNECT THE BRAKE LINES OR PARKING BRAKE CABLES. Remove the bolt that holds the end of the brake hose
to the axle and carefully remove one backing plate at a time and hang them
out of the way being carefull not to damage the brake lines. If the brake
lines aren't in good shape on the rear you may be better off swapping the
complete axle. Disconnect the lines from the brake hose, and also disconnect
the parking brake cable on each side.
-Remove the U-bolts that hold the axle to the leaf springs and carefully
work the axle out of place. If you left the backing plates in place you
may also have to disconnect the shocks. Installation is the reverse, for
the cost of new U-bolts it's better to be safe then sorry and install new
ones and while you're in there you might want to consider doing a rear
brake job if it needs it.
INSTALLATION
-Installation is reverse of removal. Once you've worked the axle into place make sure that both spring perches are seated in their proper spots
before tightening down the U-bolts. If you're going with another driveshaft it's a good idea to replace the universal joints on it before installation.
-At this point it's time to move the brake hardware from your old axle
to the new if you didn't swap backig plates. If your new axle has 11" drums
and the hardware for it isn't reusable you'll have to swap your old backing
plates over to the new axle if you don't want to purchase the new hardware.
Because you're going to a different gear ratio in the back, you'll need the corresponding speedometer gear for it. Place a bucket under the transmission to collect fluid when you remove the old gear. Changing the gear is straight forward, when re-installing the assembly make sure that the group of numbers on the black housing that corresponds to the number of teeth on your gear is at the 6 o'clock position.
