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Well, I can think of a couple of things. Number 1, are you sure the noise isn't comming from your rear diff. The independent rear end isn't as strong as the solid 8.8 axles of the older mountaineers. The toe links go out, and it causes the axles seals and rear bearings to go out. However, in this case I would look at the axle seals going into your rear diff. carrier. If it looks like your leaking, you could be blowing out the limited slip diff in the rear end. That would make a whining noise, and a lack of power because of the diff spinning instead of the tires. Now as for the transmission, that could be bad news. Ford does have a TSB for one of the internal parts wearing a groove in the casing. If I remember correctly it is one of the shift solinoids. That could be another cause the truck itself not going into gear. On the other hand some of the older Explorers had problems with the valve body gasket and that can do the same thing. So you may want to just change the valve body gasket and see if that fixes the problem before you have your whole trans remained. I know I threw a lot at you, especially with that added stuff about the rear end issues, but that is all items you might want to check.
Milky colour in the radiator means that the engine has overheated and the head gasket is blown and might need replacement after skimming the cylinder head.The milky colour is oil in the engine mixing with water that cools the engine
It can be gear whine, bearing whine, it needs to be listened to by a tech to decide which, but generally the gears are noisy only at certain speeds that would be around 45-65 MPH and it would come and go with being on and off the throttle. Bearing noise is there all the time.
I would have someone check the U-Joints on the drive shaft. When they go bad they will cause a vibration when you are driving down the road. Taking your foot off the throttle stops it because the torque is being applied to/by the driveshaft any longer.
Give the old man a pat on the back! There is an oil plug on the rear differential. On a level surface, remove the plug; if oil starts to flow out, the fluid is full. If no oil flows, carefully put your finger in the hole and feel for the oil level. Your finger should go no lower than the first knuckle before you feel oil. If it goes further, you are low on oil and should either fill it up or better yet replace it. Rear axle oil doesn't get replaced nearly often enough in most vehicles and since your truck is 18 years old, would be a bad idea to have it changed. Best of luck.
It should be that easy if the leak is from the gasket. If it from the seal, you will have to remove the drive shaft from the differential and remove the seal and put in a new one. Either way, the repair is fairly easy.
Well you can remove the sensor in the diff and make sure that looks ok they g obad quiet often also woulnd not hurt too remove the rear diff cover and inspect the rear end if it is whining and you dont see anything wrong i would refill it with lucas oil/grease and start praying check the pinion too and see if it has any play in it