One problem related to differential unit has been reported for the 1998 Jaguar XJ8. The most recently reported issues are listed below.
Recall remedy failed. After the recall for the throttle was performed the recall defect happened again. Recall campaign# 98v022000. Jaguar stated that the they were not responsible for any further corrective action. The vehicle continued to stall. (more frequently) in other attempts to remedy the stalling problem, the dealer would reprogram the ecm (electronic control module) and suggested that the vehicle was fine. The software fix recommended by Jaguar had not corrected the problem. The consumer also stated that a chirping noise would occur upon deceleration. The front brake shroud was adjusted. Jaguar investigated and changed an idler pulley and the serpentine belt but the chirping noise was still present. The problem was diagnosed as a bad differential at 80k miles.