Dana 35 grinding noise....

I noticed a noise that sounded like sand in the drums comming from my 91 cherokee 4x4 when I was backing up and turning the wheels not to long ago. I pulled the cover to change the oil and none of the gears appear to be damaged. When I turned the tires and switched directions there was some play in the gears. i don't know much about differentials so I don't know exactly what it was. It was the gear that is inside the round thing in the middle that if it was oriented right the rear of it was showing through a hole and pointing at me. This probably makes no sense but basically there was some play in the gears... any ideas? If someone has a good pic (I already put the cover back on) I could point it out better.