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Howling sound: need help



I have this 1988 Audi 80 (2.0 liter engine). It has the 5 speed
tranny.  Whenever,  I go over 40 mph I get this loud howling
sound.  It becomes less after doing over 70 mph for an hour
but that maybe my imagination.

We checked the differential fluid level and that is ok.  Also,
on rotating the wheels, there is no sideways motion - I think that
means that the bearings are ok. 

One symptom is that whever I engage gears (let out the clutch)
I always hear a thump as if there is some slack.  Could it be
that the differential has worn out ?? Please help as I do not
want to get stranded on the highway or create more 
problems.

Best Regards,
Vikram.