OK, spacer in for speedo drive, axle torqued up to spec
Zero sound in stethoscope with wheel slowly turning.
I'm thinking that ridge (or any cause of lateral loading, e.g. driving D/S bearing in too far or not far enough at outer race) causes a cascade of issues.
Overheating of the bearing causes the inner race to start turning.
That starts the 06.7704 spacer to turn, eating a nice circle into the pot metal speedo drive housing.
The inner side of the speedo housing then starts to bind on the wheel hub cover, which produces the heat which eventually warps the drive housing.
I'm not convinced overtightening of the axle nut is the cause of that deformation.
So, IMO, if you have binding of any kind on the rear axle, retreat to first principles and check the bearing spacing first.