When the wheel is off the ground, yes you should be able to pull
on it and see if it moves however note that you dont torque an axle
castle nut. Its hand tightened, then backed off a hair and pinned.
If your gonna go through the trouble to jack it up, pull the wheel
and then the hub. Its a two second job to see if you have a problem to
prevent a headache. It requires no special tools. If the rear seal is
blown youll see it coming out of there. Looking at that, I would do a
rebuild on both sides just to be sure before you have a race/bearing go
bad in the middle of no where. When a race burns up you can either spend
hours knocking it out or buy a new hub assembly for $35.
Let me tell you, looking for a bearing and pounding out a race under
the headlights in the dark isnt fun. Letting your boat sit along the