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Symptoms of failing differential? 200 1982

My differential is making a clunk / crumch sound when I shift from Reverse to Drive, I have recently replaced all of my suspension bushings and things seem to have gotten worse since then. I can see the nose of the diff shifting a little bit when I shift gears, is this normal? How much should the drive shaft rotate when I shift gears? The rear end is very quiet on the highway, I just cant get rid of these noises while shifting or at very low speeds. Any thoughts?

Matt

--
'82 DL - 150k, '93 940 - 93k






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