This may sound strange, but what engine do you have?
When I first got this land rover (V6 with PO made exhaust), it made a nasty clunky noise which I could not figure out every time I put it in four wheel drive, in the end, it was the propshaft rubbing the exhaust, the hammer sorted the exhaust out to bend round the propshaft properly...
You mention the problem when the hubs are engaged - is this when in two wheel drive, or 4?
A couple of things to try for isolation of the problem when driving, isolates a front axle (or hubs issue), or front propshaft.
Hubs disengaged - low box (red lever back) - gives 4wd and rotates front prop - got noise?
Try again with no front prop if you then want to further eliminate it and blame your transfer box.
hubs engaged - low box - gives 4wd, rotates front prop, and hubs - got noise?
Try again with no front prop to blame your front diff / other axle component.
To eliminate a axle bits, I think you could do something like:
Find a flat surface, jack up one wheel, chock the opposite corner (first)
Disconnect the front prop
Engage both hubs
Turn the wheel you've jacked up, and watch the input to the diff - it should Turn as you are turning the wheel, if it doesn't and it's grinding you've got a broken half shaft in there (or cv). Try the other side too.
Hope it's just the prop...