Toyota Repair: loud clunking/friction/grinding, half rest, jerky movement


Question
I have a 1996 Camry, 2.2L 4cyl. LE Sedan 4 door, 200k miles, I bought like 8 months ago. Car has ran great and I love it. Previous owner said he had taken care of it since he bought it like 5 yrs before. I went through the list of maintenance tasks, performing them as I could. Has been very reliable until now...
 The problem I have is when I put the car in gear (any gear position besides neutral or park), the car tries to go and will move a little but then comes this loud, kinda frightening type of clunking/grinding awful noise that I haven't ever heard before and I'm a 32 yr old who has done all the repairs to every car I've owned, gaining knowledge as I've encountered different problems and fixed them. Although I must say  this is the newest car I've owned so my knowledge is outdated some for this vehicle.
 The noise is accompanied with jerky movement from the car.
 That day I had been on like a 30 mile drive out a winding road that goes down a large hill then back up the other side twisting and turning the whole way. While out there I was on a dirt road where at one point I had taken my eyes off the road for a sec and, although i was going slow, the weight of the car coming over a hump caused it to bottom out. This hump ran completely across the road and basically looked like a speed bump made of dirt, no rocks were visible so I figured the frame or skid-plates probably contacted it so I continued on, watching my dash icons and looking back for any signs of fluid loss on the road. There were none and no indicators ever came on. So I drove on and after a bit headed home retracing the route I had come. So about 60-70 miles driven on the trip altogether with a hour and a half rest at the destination. the bottoming out came shortly after starting the return trip. Once I got back to the pavement and doing the 30 mile drive back home on the winding road the car was still running excellent and there were no indications of any trouble that I noticed.
 about 2 blocks from home, I encountered 2 consecutive red lights. This part of the trip was a short like 3 mile highway (65-70 mph) ending at the 1st red light. As I came to this light I felt coming to a stop I felt a little jerky motion right before stopping. I put it in neutral for the light pattern and when green I put it back in drive and proceeded to accelerate. This is where the problem got much worse. It was making the loud clanking which had presumed to be tranny related due to the location of the noise and the jerky motion. The following light is only like 500 feet down the road and I needed to turn left so I was too far away to get over to the shoulder and stop. So I kinda babied it along shifting into neutral to coast as much as I could. When it was my turn to go, I accelerated again and the car started to take off decently this time but about halfway through the turn the jerky clanging crap started again and I was now in a 1 lane path going up a small but kinda steep incline that I had to get up because there was no where to get out of the road at. I got it to a driveway a very short distance away and put it in park and shut off the car. I checked the engine and around the vehicle observing that the transaxle cover was leaking slow drops. I checked the fluid immediately to find it mostly brown and also noticed some light smoke coming from the dipstick tube.
 I allowed the car to sit and cool off for a few hours as i lived close enough to walk home. When I returned the fluid was no longer dripping and a check of the level still indicated an acceptable amount of fluid in the vehicle so I started it up and in park it sounds fine, no noises at all, like its fine. But when I shifted to reverse (this was the first attempt with reverse and was hoping if nothing else I could drive it in reverse to my house not far away), the car just began the jerky moving and the banging, clinking, grinding noise (definately sounds broken) so I left it and returned later with a friend who knows a little more than me probably. He took a look, listened to the sound (once again after trying to drive, the transaxle case began to drip fluid, and I had never noticed any fluid drip to the ground before, although some power steering fluid is visible in the engine compartment) and he stated that he thinks the problem is the half shaft (which I had never heard that term used before so he showed me the part and I noticed that there was a round metal like plate cover thing that was on the shaft, but backed away from the transaxle case. I easily slid it forward and it fit right into its place. He said that probably supposed to cover a seal or something and shouldn't be loose like that so that increased his belief that the half shaft was the culprit.
 That is pretty much all the info I can think of to give to you. Since the incident I've talked to a few people about it and a few possible answers have been given to me.

So my question is would a half shaft be able to cause such a violent type of jerky movement and noise like my friend suggests?

Or is the transaxle, which i believe the problem to be, more likely the malfunctioning part?

And one other possibility I have entertained, which my fiance believes to be the problem so I hope its not cuz I'll never hear the end of that if it is...lol... but could it actually be a motor mount or possibly multiple mounts broken?

I've never heard such a violent sound coming from a car, hope you can help...

Answer
Hello, reading about halfway through your post I came to the same conclusion as your friend, when going over the bump the drive axle backed out of the splines inside the transmission due to being overextended, there is nothing holding the axle in except a thin snap ring, this should normally not happen but it's possible that the transmission/engine raised up enough in relation to the wheels that it did just that, you mentioned motor mounts, it's a possibility, also the seal where the shaft enters the transmission may have been damaged and may need to be replaced, the axle shaft should also be removed and the splines checked for damage. On this model the right side has a bearing mounted about halfway on the shaft this bearing is encased in a cast iron housing, there is a large snap ring around the bearing , if this snap ring popped out or is missing it can also cause the axle to back out.