As I decelerate speed, I hear one clanking noise below. It sounds like it is coming from the diferrential. And it always happens when the transmision shifts from high to low gear. Transmission is a two speed powerglide.

Sounds like a universal joint. More than likely the rear one if it is..

Shift a few times from drive to reverse stopped with your foot on the brakes. If you here the same sound, then yes, most likely a u-joint.

Ok thanks. I'll try it this afternoon. Thanks.

If you get the clank doing that, then you can crawl underneath it and rotate the driveshaft by hand with the car in neutral with the wheels chocked (and engine off). Lots of play and noises at that point should seal the deal and you might even be able to see which u-joint bearing is the culprit. I have had a few cases of the needle bearings falling out.

Of course this last proceedure is a piece of cake on my 4x4 pickup (that last time this happened to me).

Had a similar problem with my 2 speed, sounds like a u-joint, turned out to be a leaking vacuum modulator line at the the transmission. Caused harsh downshifts, worst case the transmission won't up shift from 1 to 2nd unless you shift it manually.

Yes, that makes sense. My tranny does not shift automatically. I shift it manually. Vacuum modulator line is that line that comes from the carb down to the transmission (around the cross member area), right?

Correct, the rubber hose end deteriorates and leaks. Replace the bad part and you'll be golden.

Thanks, Dr. Drivability. For the second time now, you were right on. I reached down under for the vacuum modulator hose under tranny and sure enough, it was disconnected for some odd reason. I okked it back in and automatic works, clanking sound went away. Thanks again, Doc.

Hot Damm! 2 fer 2

Beat replacing the U joints that's for sure. I've never ha an auto car so this the first time I've ever heard such a thing. I'll definitely file that one away in the useful information file. Good one.