Hey there unfortunate Td4 owners.
I have had the crank pulley fail about every 100,000Km. Better this fails than the crank shaft. The noise sounds like you have dropped a main engine bearing. Not a good idea to drive in case it does more damage. The drive belts pull in opposite directions so they tend to stay on. If you rev the engine or drive over 20Km/hr the noise usually reduces.
The pulley is, as others have said, designed to help align the drive belts with the crank shaft and also to reduce vibration. Also damps some shock to the engine when the air con compressor switches on.
straight forward fix. Jack car and make safe from rolling/falling, remove right front wheel, remove the wheel arch lower mud shield, now with crank pulley and its HUGE bolt exposed, get a dirty thumping great big pneumatic wrench and a tight fitting socket. I left the drive belts tensioned to add resistance for removing bolt. I had no trouble getting it off without needing to stick screw drivers in the flywheel. If someone has used Loctite, you may need heat to get it to move. That's heat, not a steel cutting oxy-acetylene. Try a gas stove lighter - when it burns your finger, it's warm.
There are two serpentine drive belts. Under the crank pulley is a tensioning roller. Loosen the smaller nut and the tension roller should drop a bit, and you move it further by placing a socket over the larger bolt and rotating as required.
The upper belt tensioner was designed by a (rood word) with no knowledge of usability or mechanical ergonomics. There is very little clearance to get anything in so I had to buy a 400mm long flat ring spanner with a the semi socket sticking out about 10mm from the main spanner shaft. Place the spanner over the tensioning roller bolt that is located above the crank pulley between the chasis and the tensioner. It is heavily spring loaded. Pull toward the front of the car (anticlockwise turn) against the spring and hold while you remove the drive belt from the steering pump. eep your finters out from under the belt because of the spanner slips... squashy finger. I recommend having a helper for this part of the job. You will also need good light.
Check the pattern of the belts so you can put it back the same way and then remove them. Now pull off the crank pulley. It is heavy any may be in two parts due to the rubber failure so be careful of your feet. Although there is a groove in the pulley and you think there must be a Woodrough key, there isn't. The key is further back under the timing belt sprocket. The crank pulley relies on bolt tension only. Manual says replace the bolt as reuse has fatigue crack issues. Bolt is cheap ($11AUD)
Check the front crank shaft seal. Mine was still OK after the 3rd crank pulley - if it is OK I suggest leave it because there are issues replacing it. The manual says it has to be put in place FROM THE INSIDE. The trouble is that the flap on the seal screws-up trying to put it directly on the shaft. I helped replace on from the outside by cutting a coke can into a rectangle and rolling it in a cylinder to act as a guide. A fiddle but it worked. Be careful not to push it in too far; it needs to sit flush with the outside or it will rub on the crank pulley.
Re-assembly is reverse of the above. New crank pulley was $330AUD aftermarket; twice that from the thieving original parts executives - don't blame the poor guys who work at the parts counter.
Be careful of your fingers putting the top drive belt back on and tell any children to stay away as they may learn a whole new language that mum wont like