We recently had a used motor (70k) and transmission (90k) put in this 240k car. The car was driving and shifting fine until around 400 miles, when driving we heard a clunking sound and the car locked up and would not move. My father kept shifting it from drive to reverse and giving it gas, heard a another clunking sound, and then the transmission engaged and the car drove. However, now there is a squealing sound when the car is on, and becomes more prominent in drive and reverse. Is this a transmission issue or something else? Any ideas of what this could be? We have already checked under the car and the half-shafts/axles have not slipped out of the transmission.
By locked up do you mean it seized and the car skidded to a halt?
Have you by chance checked the transmission fluid AND engine oil yet?