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Help. Clanking in low gears as I accelerate. 700 1989

This board appears to be a great resource, so I'd like to pose a question...
I have an '89 740GL and when I initially shift in to Drive or Reverse there's a loud scraping noise. The back end of the car is also lifted upwards, almost as if the torque isn't directing the car forward/backward, but upward. When I begin to drive it clanks repeatedly as I accelerate and am about to shift gears (the quicker I try to accelerate the worse it sounds)kind of like the gears aren't catching. Past 2nd gear (25-30 mph) I have no problems and the car drives great.
Now I've noticed there's a 2-3 inch thick circle of metal attached to a bar that's hanging down under my car and appears to have become unattached from the rear axle. I'm assuming this to be the problem, but I have no idea what it is. I just moved and don't know any mechanics in town, so any information I could bring to their attention would help me to solve the problem efficiently as I'm on a pretty tight budget.
I guess question 2 would be if anyone knows of any good Volvo mechanics in the Rhode Island or Southeastern Mass. area that would be helpful too.
Any help would be appreciated, thanks a bunch.






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