Yeah, be careful when you run into crap material. A true steel alloy will carburize just fine with your method or using a real heat treating furnace/atmosphere. But I've ran into a problem with gears made of powdered metallurgy. They are already hardened and will not take an effective case. The powdered stuff is sintered with all sorts of different stuff, pinch of this, dash of that, and pressured together and hardened to some degree throughout. But if you look close enough, there will be all sorts of holes and pits and good places to form cracks. I don't know if they do this with pinion gears, I've found this on a differential gear. It's nice to know what kind of metal your metal gears are made from, I'm fairly certain it won't work with stainless steels. Don't want to sound like Im raggin on ya, great thread/idea, its nice you posted it, cheap easy way of adding wear resistance and life to your gears. Never knew they made that kind of stuff.

Also are you just gettin the surface hot or are you heating the entire gear up all the way through?