Major transmission failure. Need help troubleshooting

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Bell housing with clutch arm
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Clutch pivot old vs new
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Hello All and thank you in advance for any advice. I have searched forums but no luck on troubleshooting this issue on my Defender 90 200 tdi. I have had a "clunk of death" since I imported this creampuff to Tampa Florida about 1 year ago. I use the Landy for kiteboarding only which is infrequently and relatively short distances. Today as I was merrily returning home from a decent kiting session, thinking to myself "I really enjoy this vehicle" when all of a sudden after shifting into 3rd and slightly accelerating I heard a loud "clunk" and it was just like being in neutral. I tried to engage transfer case (difficult to shift and couldn't get it in high at all) still no movement. If I put it in 3rd or 4th gear and release the clutch it has a slight grinding sound. Not so much in 1st or 2nd gear. The clutch seems to feel and operate fine but I am not ruling that out as the culprit. My buddy towed me home with a strap and as we reached about 30 miles per hour the transmission started making a clicking or grinding sound which proceeded all the way home at all speeds. I read something about "meshing gears" "side shaft" or "drive flange" . Sorry that these vehicles are very rare here and nobody has much knowledge on working on them. I am a decent shade tree mechanic and apologize if those terms are common knowledge but perhaps we call them something else here. If I could know where to start to evaluate and determine what exactly has failed I would really appreciate it! Thanks again. Cheers!
Update, I took off the PTO cover from transfer case and it looks like mud around the output shaft. Very nice indeed. Lots of play there for sure. It is a LT77 tranny. Should I get a rebuilt one or give it a go and try to overhaul this one? Any advice on a reputable source for a transmission. Will I need to change out the transfer case as well or just change the input gear and necessary bearings? I curse that Englishman that told me this would be trouble free for years to come! That guy is still jumping up and down clicking his heals together. I especially love the paint over rust and dirt. Ya'll got me good on this one-lesson learned. Thanks again for any assistance chaps, blokes, gentlemen, noblemen, or any other term appropriate- I really do appreciate the advice. Links to videos or old posts earns you a pint when you come over to the states. You still on lockdown??
 

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You can pull the gear out now and have a proper look at the splines on shaft and gear. Usual to just replace input gear for the transfer box, replacing mainshaft in gearbox is more of a job, Most fit a rebuilt box. Still in lockdown.
 
Update, I took off the PTO cover from transfer case and it looks like mud around the output shaft. Very nice indeed. Lots of play there for sure. It is a LT77 tranny. Should I get a rebuilt one or give it a go and try to overhaul this one? Any advice on a reputable source for a transmission. Will I need to change out the transfer case as well or just change the input gear and necessary bearings? I curse that Englishman that told me this would be trouble free for years to come! That guy is still jumping up and down clicking his heals together. I especially love the paint over rust and dirt. Ya'll got me good on this one-lesson learned. Thanks again for any assistance chaps, blokes, gentlemen, noblemen, or any other term appropriate- I really do appreciate the advice. Links to videos or old posts earns you a pint when you come over to the states. You still on lockdown??

To be pedantic the tranny is an LT230 and the gear box is a LT77.

Take the gear out and look. You can rebuild the transfer box yourself - will need a DTI gauge and a press and a rebuild kit from Ashcroft

you won’t be able to do the gear box yourself.
 
Update, I took off the PTO cover from transfer case and it looks like mud around the output shaft. Very nice indeed. Lots of play there for sure. It is a LT77 tranny. Should I get a rebuilt one or give it a go and try to overhaul this one? Any advice on a reputable source for a transmission. Will I need to change out the transfer case as well or just change the input gear and necessary bearings? I curse that Englishman that told me this would be trouble free for years to come! That guy is still jumping up and down clicking his heals together. I especially love the paint over rust and dirt. Ya'll got me good on this one-lesson learned. Thanks again for any assistance chaps, blokes, gentlemen, noblemen, or any other term appropriate- I really do appreciate the advice. Links to videos or old posts earns you a pint when you come over to the states. You still on lockdown??

YouTube channel called britanica restoration and another called trailer fitters tool box both have excellent videos coving all that’s been mentioned.
 
Update, I took off the PTO cover from transfer case and it looks like mud around the output shaft. Very nice indeed. Lots of play there for sure. It is a LT77 tranny. Should I get a rebuilt one or give it a go and try to overhaul this one? Any advice on a reputable source for a transmission. Will I need to change out the transfer case as well or just change the input gear and necessary bearings? I curse that Englishman that told me this would be trouble free for years to come! That guy is still jumping up and down clicking his heals together. I especially love the paint over rust and dirt. Ya'll got me good on this one-lesson learned. Thanks again for any assistance chaps, blokes, gentlemen, noblemen, or any other term appropriate- I really do appreciate the advice. Links to videos or old posts earns you a pint when you come over to the states. You still on lockdown??
As said by other the next thing to do now is pull the input gear out and see what the internal splines look like on it and the gearbox output shaft. I would second the previous comments about being able to rebuild the transfer box yourself. But I would suggest it is unlikely to be that actual box. The input gear can be replaced on its own (make sure you get a cross drilled version). But if the gearbox output shaft splines are worn you are looking at a reconditioned box.
 
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