My 2002 Freelander seems to have a clunk when changing from reverse to 1st gear, and also 1st to 2nd - not noticed it in other gears. It mainly happens when the car is cold, i.e first thing in morning. I looked underneath but the only thing I was a bit concerned about was a bit of play in the prop as it exits the IRD - clunky as you rotate the prop back and forth, with about 1/2 inch of play. Does this seem normal, or a sign that the IRD is on borrowed time?

check out the rear diff front rubber mounting.

the prop should not have play in it like that sounds like somthing worn