I'm pretty sure that this ain't good,,

 

I'm real sure that I'm also pretty sure that ain't good.

 

Definitely not good! I'm not too familiar with these ear ends or how their assembled but it looks to me like your pinion gear has either had whatever nut/bolt that holds in place come out or you've got some severely worn bearings.

Time for a rebuild!

 

^^ what turn key said
pinion nut /bearing failure-- lash adjustment way off, may be cheaper to get junk yard rear end . Never changed one myself , time for an expert shop .
That must have been one noisy rear .