I have a 1990 Carry with manual locking hubs. It knocks when the hub is not engaged, is this a wheel bearing issue or something bigger in the hub ?
Some more info would be helpful Such as... Both sides make noise yes/no Transfer case disengaged so half shafts are not turning yes/no Noise happens when turning yes/no Noise happens when going straight ahead yes/no Noise happens at low speed yes/no Noise happens at high speed yes/no Have you done anything like jack up the front and rotate tires by hand or push/ pull on tires to check for play ?
I guess more info is always helpfull: The noise (clicking) sound occurs when the truck is moving in two wheel drive, it speeds up directly related to the speed of the vehicle. However I have not taken the truck to high speed since this started (just seemed like a bad idea). The noise does not occur when the hubs are locked in. When on the rack- the wheel assembly is not loose and the wheel moves freely with out noise, regardless of if the hub is locked in or not. The noise occurs on the drivers side only.
I would pull the hub apart to check the bearing as a first step, it could be that the bearing is just on the dry side and needs some lube. Not sure what your truck uses but it more than likely is just reg wheel bearing grease. When you have it apart check to see that the races are ok if it uses tapered roller bearings and the rollers have a nice even color to them. A blue tinge anywhere would indicate that it has been getting hot. At this point my theory is that the bearing is on the dry side [needs lubrication] and the rollers are not cushioned by grease allowing them to make a clicking noise as they hit the side of the cage they sit in.
I don't have a manual showing how this hub works, but on all of the locking hubs I've worked with, the center of the hub (what you turn to engage the hub) is machined with two ramps to push the sliding sleeve (splined to both the axle shaft and the hub) into engagement. There is a spring that's used to disengage the sliding sleeve. If the sleeve is chattering against the splines (easy to confirm by visual inspection), then that will make the noise you've described. An easy way to check this out is to disassemble the hub, clean the parts thoroughly, relube them, check any springs out for breakage or collapsing, inspect the sliding collar, reinstall. I would also service the wheel bearings at that time. Typically it is safe use a wheel bearing grease on all of the components in the hub. On a side note, I have never seen a wheel bearing click, other than as a result of brinnelling or pitting, which in you case would indicate either side impact to that wheel, or lack of service that created rust in the area. Most wheel bearing issues cause a howl....and mostly when the load is maximized.