Smoke, noise, and burning smell when using 4hi

I just picked up a new Tacoma with 365000km and no idea of its past life. Unfortunately when I use 4hi there is a howling, grinding sound coming from the front passenger side, not overly loud, but enough to notice. After blasting around in a fresh snowfall for about half an hour I noticed a burning smell (like burning birthday cake and burning hair.) And a small amount of blue smoke coming from the passenger side from under the cab. Just wondering what is going on, all the oils have been changed except for the front diff.

 

I bet it's the front diff.

 

Yup that was it. Thick nasty oil and a magnet full of metal.