Joe
I have the S10 Xtreme 2wd rear in my 33 Master coupe. Same width as Tom's (54.5") some of the Xtremes had the 8.5" ring (that's what I have). I'm running stock width fenders, 15X8 wheels with 3.25" backspace...that centers them right up in the fenders.
If you need any pics...let me know.
Learned that the drum brake 2WD S10 axles are 54.5", I also have another S10 2wd rear axle (8.5") with disc brakes..it is .50" +/- either wider or narrower ..can't remember right now...but there is a slight difference between the drum & disc rear axle widths.
I'm sure it's the splined axle lengths that are different because I tried to swap the disc setup onto the drum brakes axle and it wouldn't bolt up..the mounting flange and axle were off about 1/4" so the rotor would center in the caliper.
If your not going to pound the car...the standard 2WD 7.5" (54.5") axle will be fine - same set up they use in the Monte Carlos etc.
Besides - those 2WD 8.5" S10 axles are getting expensive..they just sold one (posi disc brakes) for $1200 on eBay!!!
Ed