If it's standard and not been modded at all, the 3.0 was usually only fitted to the later square headlight (mk4) which also had fixed hubs as standard, this means that even when 4WD isn't engaged the front prop will be spinning.
My money will be on the UJ's or Union Joints will have worn out on the prop itself and needed swapping as they were making a noise, that's best case scenario.
It could also point to issues with the driveshafts, it's possible that the CV's are disintegrating and clunking etc when cornering.
Worst case scenario, the front diff has gone, could have been neglected and not had fluid replaced and gone bang, could also be a problem with the transfer box on the gearbox, I've only ever known of one snap it's chain
but that was a real real off road workhorse on a farm.
Get them to put the front prop back on so you can see what it's doing for yourself, anyone worth their salt genuinely trying to shift the vehicle without trying to pull the wool over your eyes should do that, it's only 8 bolts