grinding noise and loud clank when put in four wheel drive

I bought this truck with a vortex 4.3, the transmission when put into drive, it seemed to start off in second gear, it will go in manually. I got it home and tried to engage the four wheel drive and there was a lot of grinding noise and loud clank. I managed to get it back into two wheel drive, but when the shifter is put back in drive, it seems to be reversed, or its stuck in first gear! Any ideas?