Ok, what am I doing wrong?

I have a Duratrax Nitro Evader. The first ball diff lasted me about 6 hrs of running before is melted out. I installed new gear, 3/32 balls and diff rings. The instructions do not say anything about grease or adjustments except for tighten untill snug and back off 1/8 turn.

Well, I used some Lithium grease on the balls and rings. assembled and tightened untill snug and then backed off 1/8 turn. When trying the car I fond that it would not move forwardunder a load. SO I tightend up the cap screw some more and found that it worked OK.
The problem was it only worked OK for about 10 mins of running and then it also melted the plastic diff gear.

I then rebuilt it again, trying not to over tighten the cap screw and made slight adjustment on the tension untill it worked ok.
The 3rd gear alsted about 5 mins and it also fried.

Anyone got some help here???

Larry Barnes