This is a problem that I just finished fixing on my Cub. Once engaged, the mower (Woods 59) ran and cut great for about 30 feet, then it sounded like a bag of hammers in the differential. As it turned out, it was not one magic part that needed to be replaced rather a few parts.
The tractor was split between the transmission and the torque tube, and we just went from there. The main problem truned out to be that the front bearing (original IH bearing) on the driveshaft had worn out and was allowing the driveshaft to move back and forth. This back and forth motion also caused the bearing race to wear away the shoulder on the driveshaft that it was pressed up against. This wear on the shoulder allowed the driveshaft to move back and forth even farther, causing even more wear and end-play. The end of the driveshaft were the clutch for the PTO engages was also worn, with the end of the shaft being worn round and quite a loose fit on the splines as well.
The actual PTO shaft was in good condition and the pilot end was within the specifications that are laid-out in the service manual. The shift lever for the PTO clutch was worn down on both sides, and was nowhere near being round, and the PTO clutch was a rather loose fit on the new driveshaft. All-in-all, it was wear in more than one component that added up to a lot of wear/slop in the entire system. So, from the local Case dealer I ordered a new driveshaft, front and rear bearings for the driveshaft, a new front seal/retainer, a new PTO clutch and shift lever and all of the other sundry needs for this repair.
I was definitly not happy about spending the money, but I would rather just do the job one time than have to tear it down again to fix/replace the one thing that I thought was good enough. In the end, the PTO and mower work excellent and that low growl that was heard sometimes in second gear is now gone. Remember, don't just replace the part that failed, find out why it failed, so it doesn't happen again. Good luck, and let us know what you find.
Where you are, right now, is of absolutly no use unless you are able to get away from it, FAST!