Back on topic:
I don't know a bunch about the old front drive Caddies so help me out. If he is using the original transaxle but then firing one of the axles back to a conventional (albeit with a highly offset diff) live axle, then what is he doing with the other axle stub?
EDIT: Opps, those engines were mounted longitudely (sp). Soooo, is there a separate diff mounted directly to the tranny in the stock configuration that your buddy removed? Maybe another pic of the motor from the other side would help.