I think it's pretty well covered.
It's either a failed transmission or the release bearing (it's not the clutch pressure plate because it would slip if it were loose), most likely the former, assuming the noise is present in neutral with the parking brake down. That immobilizes everything from the transmission mainshaft back to the wheels.
There are probably some "goodies" in the transmission fluid.
I take it this transmission has a stamped steel bottom pan? Most but not all 1988 2.9Ls do. That's a standard failure mode for this transmission. Usually, it's a failed input bearing, but it takes a lot of stuff with it by the time it starts banging (the first symptom is usually a whine in every gear but 4th and that's the time you can actually think about changing just a $40 bearing).