sounds like a diff or half shaft has given up the ghost.
take it out of diff lock and put it in gear, have a look underneath one of the props will be turning, the axle that spinning prop drives will be the one with something fubarred in it.
if its the rear one, start by pulling the half shafts out if one is snapped thats the culprit if not once the shafts are out you can then pull out the diff after taking off the prop and replace with a bay of e special.
if its the front one its a bit more of a feck on but basically the same principle, but involves more stuff to pull off as tere are cv joints in the way and stuff.