You don't say how many miles you have on it, but pinion bearings start to get sloppy around 100K. If oil is leaking out the pinion seal, it's time to have the rear end rebuilt.
If you decide the rear end is going out, don't bother replacing it with a junk yard axle; it's likely to be just as bad as the one you have. You should be able to get it rebuilt for between 500 and 1000, the higher number if the ring and pinion set have to be replaced. If the truck doesn't have a posi rear end, this is a good time to install one.
I would take a close look at the CV joints on the front axles, even though you have the noise in 2WD.
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Today's Featured Article - Case Farm Equipment - by Jeremy Sweeten. My name is Jeremy Sweeten and I am currently a junior at Purdue University. I am takin a dual major in Agriculture Systems Management and Agronomy. I am from North Central Indiana, Miami County to be exact. My dad teaches for Marion Community School Systems an outdoor lab called Asherwood. We live there to manage the place. They just happen to have a Case 311 with a Triple Range transmission. I grew up mowing, pushing snow, and hauling maple sap with it. In 1986 my parents bought an old,
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