Assuming its not a heavy duty axle, ie a stock landy diff......
The pinion height shouldnt be changed, Its set by a shim stack under the pinion gear.(leave that alone)
strip out the diff, install locker etc, and reinstall slack against the pinion.
Holding the pinion still, adjust the adjuster rings till theres about 0.8 mm backlash in the crownwheel(measured at the edge of the gear with a dial gauge) then preload the bearings by screwing the adjuster rings inwards, checking for the backlash to remain the same.
I dont remember a figure for the bearing preload(Im sure someone will) but they are taper roller brgs, so a wee bit of preload, not too much)
Lock the caps down, job done.