These problems were recalled in the early '02 model year trucks, if equipped with the manual transmission and the FX4 package 31spline rear.. BUT....there's been many reports of Early '02 trucks with autos have this little grinading issue. If the truck was made after, lets say, Feb 02, you're in the clear. I'll try and find the effected dates and post it up.
my torsen on my 02 auto tanked on me as well..... the manual and autos had the same rear end i believe but only manuals were recalled... stupid ford! i scored an identical rear end off of an 04 from a junkyard for 400 bucks with 19,000 miles on it with the torsen and no problems since. I wish you luck!
Seriously....get it to a shop or call around for quotes. TracLoc mentioned earlier is pretty cheap and a decent diff. Throw in a open carrier, run open for a while, then get an aussie locker. Remember....Bronco's, E150s, F150's, Explorer all come with a 31spline 8.8...tons of doner axles out there for parts(like open carriers and spiders gears). If your current axle housing is good, why not reuse it? You've already got a sought after axle, it's already 31spline. Fix your current axle or throw in an Expo.
I have NO DOUBT that that yard that wants 650 for an axle...you'll get a 4.10LS 28spline 8.8". They have no clue 31 splines come in the little Rangers.