Looks like one of two things happened..
the set screw for the center pin let go and the center pin slid out of the carrier and contacted the diff cover, hence the hole and then hit the back of the housing and chewed up the carrer and spit out the spyder gears
or
the center pin sheared (quite common) and then same as above.
if you plan on staying with a D35, I strongly suggest just finding a used D35 with same gearing and if needed, just swap your brakes over. D35 shouldn't cost more than $100 complete.
or
good time to upgrade.