Unique index corrupted SQL. Select query returns single row but create unique index fails
if you consider error, Msg 1505, Level 16, State 1, Line 2 The CREATE
  UNIQUE INDEX statement terminated because a duplicate key was found
  for the object name 'dbo.MSmerge_contents' and the index name
  'uc1SycContents'. The duplicate key value is (7696031,
  08703987-557d-e111-9888-e61f13c44f03)...... I am running below Query
     select * from msmerge_contents where rowguid='08703987-557d-e111-9888-e61f13c44f03'
  and it is returning only 1 row


When you have index corruption problems (ie. keys present in NC index but not in base table or vice-versa) you must be very careful about the SQL you use to validate data. At this moment your data is inconsistent but the query optimizer does not know that and completely trusts your schema, including these incorrect indexes. As such it may optimize your query to use one of the NC indexes that is missing a key and the result will also miss a a key falsely returning no duplicates. To solve this catch-22 situation you need to force the optimizer hand by explicitly requesting an index or another and make sure the projected list of columns can be satisfied by the index you enforced (ie. no *). Assuming uc1SycContents is not the clustered index, try out the following:

select rowguid
from msmerge_contents with INDEX (1)
where rowguid='08703987-557d-e111-9888-e61f13c44f03';

select rowguid
from msmerge_contents with INDEX ([uc1SycContents])
where rowguid='08703987-557d-e111-9888-e61f13c44f03';


This will forcefully check if the rowguid has a duplicate for that guid in the base table clustered index (index id 1) vs. the index uc1SycContents. I expect that the first query returns 2 (or more) rows while the second returns 1.