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Depending on when it was built, a '69 Ambo could have either 8/37 (early) or 8/35 gears (later, more common). My '69 was built Dec. '68 and has 8/37. In your photos, the inner race of the needle bearing has drifted off the hub partly and could definitely cause sealing issues. The gear teeth look a bit worn as well.
I'll have to access some pullers to get any further. Rear ends are stinky business