hard knock in front differential

I have a 97 all wheel drive Ford Exloder and if the vehicle is moving (in gear or nuetral) there is a hard knock coming from the front differential. I thought it was a trany problem but I lifted the front and blocked the rear wheels off and could see thats where the knock was coming from when it idled in drive. When I blocked the front and lifted the back the rear wheels spun with no knock. What am I facing? A completely new differential.. having it rebuilt..? Is this an easy/cheap fix?
Thanks for reading and answering.  

I am answering my own question in the event someone needs this information. After a lot of research, I discovered and personally fixed the problem. It turned out to be the upper and lower ball joints. I spent around 350 for all the parts and saved myself at least that much by doing it myself...which was not easy! Since I had it apart, I also changed the shocks. Feels like a new truck with a tight suspension. You can rent the specialty tools you need from Advanced or AutoZone.  

Thank you for the follow up to your problem. Hopefully it will help someone else with a similar issue.