Replacement axle?

If it were up to me, I'd take a look at that Dexter 4200# axle that will allow you to keep your 14" wheels.  The 700 lbs. of extra capacity is probably about all you'll need.  Is it really cost effective for another 800 lbs. of capacity to have to go to the expense of tire and wheel replacement when the trailer chassis is really built for the 3000 lbs. GVW?  

Asside from weight capacity, are the 5000# axles really that much "beefier" than the 4200# that they are less susceptible to getting bent under normal use?  If you're driving on really rough roads where there are rocks and such that could hit the axle, it seems to be focusing on ground clearance may be worth the effort.  Does the heavier axle provide significantly greater clearance apart from the change to 15" wheels and tires?  

Best of luck in sorting this out and let us know what factors you considered in making your decision.

4200# is better than 3500#.

Why replace? It isn't minor wear on the inside. It really is significant. We are returning from a trip and I noticed the tilt of the tire and then felt and saw the wear. I also had the brakes squealing. It sounded like it was coming from the tilted wheel, not the passenger side which is the one where the brakes seem to tighten up too much. I also was noticing that there seemed to be some increased heat at the axle that I will want to get addressed also. Before I spring for a new axle though, I will take it to a shop to make sure I am reading the symptoms correctly. I don't want to spend money unnecessarily.