Sounds like the diff input bearing is dead. It can be replaced, and whilst the diff is out check the state of the rest of it. If it's all a little lunched then, as TD90 says, get a 2nd hand one, they ain't that expensive. Or just say to heck and get a complete axle (which'll cost you £125, or less, on the open market, if you look).
You may find it's taken the prop UJ with it (they have a tendancy to do that), but swapping one of them is neither difficult nor expensive (parts a way less than a tenner!).
HTH
Cheers
8)
Eeyore