Thank you all for your input...
So I changed the fluid as recommended. It did not look right... there were some metal shavings in it! I tried driving it a while with the new fluid. The behavior got worse.
In the rain, both tires would not hook up. And then i started to get a serious clunking when turning tight!
I have the Certified Used GM warranty that lasts 3000 miles. I took it back to the dealer and they took a look. Turns out they replaced the entire thing! Parts came out to $2800 ... but the cost to me was $0.
I just got the car back today... the result: hooks up just like any other limited slip diff I've owned.... so i'm happy... see
What I think happened: I had the shop print up a repair history for the car and the diff gasket had been replaced. I'm thinking that the gear oil had probably drained out and was driven a ways low/without and that did some damage. Instead of fixing things then, they just put on a new gasket and added some fluid.
Thanks again everyone for the input!!!