I have just recently replaced my 305 with a 350 in an 89 RS, anyways last night I was out test & tuning the car down the highway and on the way into town I stomped on it from a stop sign & I thought that the passenger rear wheel fell off (made one hell of a noise). When I got on the driveway I tried it several more time, & it sounds & feels like the rear passenger tire is the problem area. I pulled the rear end apart this morning but couldn’t see any damage or pieces of metal in the housing. Am I missing something here or is it possible that maybe it’s the transmission but I didn’t notice any spikes on the tach as if it were slipping.

 

Are you sure it came from the back wheel? Have you checked the transmission mount and torque arm mount?