Driveshaft?
 

Mine did the same thing a while back and it turned out that the setscrew had loosened a little where the center driveshaft attatches to the diff pinion. I thought the diff was cooked but all it needed was to be locktited and cranked down. Hope that helps.

I tried that but it still made noise. I can now turn it by hand and hear a bit of grinding so it's definitely got gear problems.

I put the front diff in an aluminum case and turned it by hand, still noisy. I replaced the pinion bearings and that made no difference. Then I put the front pinion on the rear diff and it was a little noisy but not too bad. With the rear pinion on the front diff it was still rather noisy. Going to order a new ring gear (already got a pinion on order) and hopefully that will get it running right again and hold together for a while. I'm up to about $65 worth of parts not including the ring gear and I don't have a job anymore :no: