Whenever I put any kind of torque to the wheels, I get this speed (not RPM) dependent grinding/popping noise. I jacked the car up and rotated the driveshaft back and forth and noticed I have about 1/4 turn of slack before one of the wheels turns. As I rock the driveshaft back and forth, the rear makes a clunk as it catches and the wheel turns. Any thoughts on what the issue is?

 

1/4 turn seems like a lot. All I can think is broken teeth on the pinion gear.

 

I thought so too, but it does it independent of position. That would mean that every other tooth was broken. Do you think that slack would cause the noise under high torque?