@cinque500 You woke me up!
Are you doing things the right way round?
The preload is set first. At this point you don't want the crownwheel and pinion binding on each other, but backlash perfection is not needed. Both castellated rings will need adjusting towards each other so that whilst the crownwheel is still just "kissing" the pinion the bearings are "tight" to that 1lb/ft turning torque. Then, by tightening one castellated ring, and loosening the other by exactly the same amount at a time, you push the crownwheel either away from or towards the pinion until you have the correct backlash, without losing the preload.
At that point the exact preload may in any case have been lost....but if you have done this carefully it should be only by a fraction. But then the same principle applies. Whether you need to increase or decrease preload you must move both those rings either towards or away from each other by exactly the same amount. This should not affect the backlash as at this stage, that additional loading on the bearings amounts to a microscopic amount of movement.
However, you may then want to recheck the backlash, and this can go on
ad infinitum depending how patient you are, or how much of a gambler.
As with any bearings, if you apply pressure to them they will eventually tighten, bind, and then fail. So if the above guidance doesn't work, something is allowing "give" or something immovable is preventing the application of load.