1999 cobra help

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I am in the process of upgrading my suspension but after pulling out my rear springs I noticed a big tear in the rubber insolator on the drivers side half shaft.

Ford tells me I need to replace the whole knuckle what can be done I dont want to spend the $500.00 they are asking for a new one.

its just the first rubber insolator right after the spindle

Can someone give me some cheaper options?

And what causes that to be damaged?
 
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