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I wanted to update everyone, hopefully our saga is over...
The other day, I went to back out of our driveway and vehicle got stuck in reverse. I tried everything, going in drive and then back in reverse, shutting off the engine and trying again. So we had it towed in to a Ford Dealer. $600 later, we finally found out what the problem was.
They said the cause was a torn backing plate, that's was was going when we heard the clunk in reverse in the past. It finally snapped and froze us in gear.
They replaced the right backing plate and both rear axle seals.
I want to thank everyone for their replies in the past, this is a great website. We've learned a lot just reading other posts.
Anybody know what the backing plate does other then tear after hearing the clunk for a while? I've got a '99 XLT and there is, what I always assumed is normal, a clunk on my truck when I put it into reverse that sounds like gears shifting on a manual transmission.
Yeah, I have noticed that too on my '03. If the trcuk has been sitting and I go in reverse first, like to back out of the driveway, i don't hear it. But if I stop from drive and then back-up I hear it clunk. Like something is shifting from the being settled in going forward. I always thought maybe it was the rear suspension shifting or the tranny shifting or something. I used to hear this on my '78 scout, but I knew what that noise was.. it was my rear axle shifting on the leaf springs from my homemade lift not being an "exact fit". If it continues or sounds like it's getting worse I will take it in, luckily I am still under warranty.