Is my diff busted? Next steps

TJ_owns_a_TJ

Y2K Flame Red TJ
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Texas
2000 Sport with the 32rh trans (145k miles)- had that rebuilt Dec 2020 - last 3-4 weeks Jeep has been sluggish accelerating , knocking sound when accelerating from stop, trouble getting out of 1st gear. Thought it might be trans - took to shop under warranty they said it’s ok.

Checked rear differential (don’t use 4wd / doesn’t work rn) And oil came out tar black , with some glitter - am I hosed? What can I do , would it be ok to clean up - replace gear oil and put cover back on and see? Or is it time for earlier than expected regear. Should I check the front as well ? I don’t think the diff fluid has ever been changed. D0776885-7F97-44D9-BCBC-1856EBE00161.jpegDBA8D78A-2FFA-49AD-BD6C-E6677B6ACAE8.jpegFC92E882-2EBD-418F-89A1-44CA16EF3C69.jpeg
 
Spray it out with brake cleaner & seal it up. Refill.
That “glitter” has been in there longer than your mystery noise. You would have a stroke looking at neglected manual trans fluid.
Gears wear and there will be some loss of material. No chunks?, No problem (for the most part).

Have your shop check your symptoms of being sluggish.
 
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It seems like you have two issues (sluggish acceleration with knock and differential wear).

Take some brake cleaner and clean out the diff thoroughly. Share some closeup photos of the R&P, etc. Glitter wouldn't worry me as much as chunks and larger grit. Do you know when it was last changed and what type and weight was used?
 
I agree that the oil appears to have never been changed. That grit/ glitter looks normal, especially in OG gear lube. Yes, you should check the front axle as well.

Yes, keep looking for your source of knock and sluggish acceleration.
 
Sorry didn’t take pic of ring and gears but no huge chunks - resealed with RTV and refilled with gear oil (will have to double check which kind) - no leaks but still knocking and acceleration issue - any ideas what to troubleshoot next?
 
We're going to need some more details on the knocking or maybe post a video with audio? Can you tell if it's coming from the front or the rear? Does it change at all with speed or which type of road you're on?

Any stored codes or CEL?