Finally got onto cleaning up the manual diff. Disassembled the thing, gave it a good clean with a bunch of wire brushes, hit it with rust converter/primer and a few coats of paint, then resealed and put back together. Made for some pleasing before and afters.
Then went on a hunt for the culprit of the clunk but still couldn't pinpoint it with any certainty. Jacked the car up and had a mate operate the clutch. Clunks like a bastard every time the clutch is engaged to go into gear.
Video
Found a few videos on YouTube as well with exactly the same issue, combed through all the comments but doesn't seem like anyone's found a definitive answer either. Some are blaming the dual mass flywheel, some say it's driveline slop and their mechanics are claiming it's perfectly normal. I somehow doubt it.
Regardless, got onto swapping out the diff. Tried reproduce the clunking with the driveshaft disconnected but all seemed fine with no load on the gearbox. Had another try once the shaft was connected to the diff and still all good. But then with the axles hooked up to the diff the noise came straight back. The search continues.
Bit disheartened, bolted everything back up to go test out the manual diff and was pleasantly surprised to discover that the clunk had became much harder to reproduce. Definitely still there if you're looking for it but nowhere near as prominent under normal driving circumstances. Going from a 3.38 diff to a 2.93 fixed the gear ratios right up, 1st gear actually became usable and overall the car was now more pleasant to operate. Properly enjoyed driving it for the first time since the swap...
... just in time to park her up for the next 3 months as I'm off to Europe to catch up with family after 4 long years. Will pick up where I left off in September ✌️