Differential or Axle noise / clunk?

This assumption could be erroneous.
Lubricants in trannys need to have the right balance of the ability to lubricate, the ability to stay on the surfaces of spinning gears despite centrifugal force, the ability to be drawn up between the gear teeth, AND the ability to withstand the compression of the mated teeth without being squished out or otherwise failing. I still feel that the use of improper lubricants is highly risky.

Differentials of old used to use 90W oil. It feels like goop coming out, but a lighter weight lubricant that feels like it has more ability to lubricate would allow the differential to fry.

TSM is correct, always best to use the exact lube the owner’s manual specifies. But as far as I can tell OP has done that. I doubt the popping out of reverse is related to the gear oil choice, assuming the fluid level is correct. My guess is that the shifter linkage needs some adjustments. If you can find the service procedure it might explain how to set up the reverse linkage to spec. If it isn’t the linkage, probably looking at removing the transmission to discover which part has worn out.

btw, the reverse pop-out could be normal for your car. Entering reverse securely is probably the most problematic gear on my Corolla M5 It was that way on my Rabbit too, maybe even a little harder on the Rabbit to get into reverse. It will pop out if I don’t get in in securely as I engage the clutch. I presume it is related to the transmission design and the low gearing for reverse. When that happens I have to slightly engage the clutch first, then it will slip in correctly.

yes it does look like I am using the correct weight of gear oil in the
transmission. the m150 transmission in my 1992 Paseo is one of those
Transmissions of old that uses 90 weight gear oil.

I don’t have any problem getting into reverse it’s just that it’s popped
out twice. I’m also in the habit while not moving to shift into first and
then to reverse as I’ve had several cars over the years that would grind
terribly when trying to engage reverse from a stop. Ever since then I’ve
had that habit - every stick shift car that I’ve driven has had no issues
engaging reverse or at least getting the shifter in the notch. This
includes at least one car somebody else owned and they were surprised at
the ease of engaging reverse. I don’t think that’s the cause of the issue.
It very well could be just something that happens sometimes on this
transmission but I do think I will attempt to track down any shift linkage
adjustment procedures that I can. Maybe in prep for spring maintenance LOL

A little bit later I’ll take a peek and make sure nothing’s leaking from
the drain or fill holes but the fluid was full after I changed it and also
full about a week later when I drained off a quart or so to check for
additional wear particles so the fluid level should be good

Maybe I should also mention when I got the car the clutch master cylinder was a very very low on fluid practically low enough to allow air in the system but not quite I don’t think. I topped it off and drove around for several thousand miles. Then I bled the clutch. At no time did I lose any fluid and the clutch activation and feel has been the same since I drove it home with low fluid.

Thanks again

That would suggest that the fluid has, with use, been moved to the save cylinder. This would suggest a worn clutch.

You may be dealing with more than one problem.

That is exactly what I was thinking. At this point I’m not considering some
clutch wear to be a problem - but it’s good to have my suspicions confirmed.

I think a couple axles & proper (read: ginger) driving & I’ll be good for
quite a while.

What is “ginger driving”?
do you mean driving gingerly?

No. I meant driving like a red haired person with freckles. Would that describe you, sir? :smile:
Yes - driving gingerly. But grammatically… It just didn’t seem to fit that sentence structure I had going with that wording. Sorry for a minute I forgot this was grammar school and not a car forum.