No, I don't think it's broken if it's a Traction-Lok. That picture is of an open differential. Auburn DOES make a limited slip diff for the 9" though, could be the same style. I've never dealt with an Auburn.
Here's some info on the internals:
http://www.ultrastang.com/Rearinfo.asp?Page_ID=2
How is your fluid? Any friction material in there?
Jack the car up and slowly turn one wheel. Do you hear clunking or clanking?
I haven't rebuilt a Traction-Lok yet, but I know with Eatons you can "tune" how hard they grab around corners and such by using different preload springs...