drivetrain slop

95 with AODE & a B&M shift kit.
I hear a clunking noise 75% of the time going into R or D. And on rare occasions when it starts from a dead stop. I checked it out over the weekend. I locked the rear wheels and twisted the ds. The clunk was coming from the tranny tailshaft. When I think back, I only checked it in neutral.
I researched old threads on this topic and the common theme was that slop and the clunking sound were normal. These threads were about 5 speeds and 4.6's though.
Is this normal? or is my tranny a dead man walking?

U joints all appeared solid. I did not check the pinion nut though. As soon as I heard the clunk come from the tranny, my attention was fixated on it. For financial reasons I'm hoping it's not the tranny.
So the clunk that I hear could be a product of a loose pinion nut?

Also, I'm not too familiar with differential parts, but I am assuming the pinion nut is on the front of the dif.