Thanks for all the concern, the problem is the transfer box. With the help of another 4x4 guy I swapped it for another on Monday. After taking it out I found the cause of the noise - just as the front prop emerges from the t/box there is a small ring. I think it might be a dust cover or something. This was loose and rotating in a random fashion with he prop and it was rubbing against the t/box case. It had started to wear the case with some aluminium filings apparant just inside the casing. The next item inside is a seal and bearing so this wasn't good news but not necessarily as bad as the horrible noise sounded. Having got that far the best option was obviously to put the replacement box in. This we did and it all worked - low/high diff lock etc and we filled it with oil (after fitting a new g/box-t/box seal) and no leak. So far so good, so I came home, sadly by the time I arrived a leak had developed from around the front prop. Kieran has a new input shaft lying around so the plan is to put that in with new bearings and put new seals in the front and rear prop ouputs.
Should all be done tonight .......