Had my father-in-law in the car last night, listening while I'm driving. He said he could hear it when driving in a straight line, the exhaust note was too loud and I didn't hear it until I was off the gas.
He said it was definitely coming from the rear end (he's a farmer who retired from GM, he knows his stuff), so I pulled the differential cover. It looks like there is way too much end play on the passengers side axle shaft. The c-clip is still there, but the axle itself can move a good 1/16, maybe 1/8", so I figure this is the knocking. It gets worse when turning, but that would make sense, as the lateral load would cause the axle to slide. The FSM only says that the axle end play shouldn't have to be set, since the design of the c-clip should hold it in. So, any clue how to change this?