I'm confused. Is there play IN the green cup or does the green cup itself move? The half shaft should slide around in the green cup (toward and away from the centerline of the VX). This allows the half shaft to "grow" or shorten in length as the front wheels go through their travel (up and down). There is a little wire "C" shaped ring that fits into a groove at the edge of the green cup to keep the inner CV joint in place, but you really don't need it. Once everything is put back together the suspension doesn't travel enough to allow the inner CV joint to slide out of the green cup.

I can't remember from when I replace my half shafts, but there may be a little in/out play with the green cup itself. If there is an excessive amount of play then something is either loose or worn out where the axle (with the green cup) connects to the axle housing. If that were the case, though, I would think that you might have a fluid leak where the axle goes into the axle housing (which, now that I re-read your post seems like what is happening). There is a seal where the axle goes into the axle housing that could go bad. I think that is what Bart (nfpgasmask) had to replace, which prompted his write-up.

If pictures will help you to visualize everything, I have an extra axle assembly that has the axle bearing, spacer, snap ring and the plate that attaches to the axle housing all assembled. I can take some pictures of that tonight so you can see what is going on in the axle housing.