96 Blazer - Wind-up Sound on Accel and Decel - HELP!

Ok. Here is my situation. I have a 96 Chevy Blazer S-10 4x4. It has 156,000 miles and 7,000 on a new engine. No check engine lights, no gauge problems. I'm hearing a wind-up or siren type sound when I take off and when I come to a stop. No sound at idle. I took it to get my oil changed and the guy said I needed a front differental "Rebuild" and wheel bearings. I said, OK THANKS, and went home. I got thinking about it and discovered the my 4x4 indicator light had burned out and that I HAD BEEN IN 4hi for months. This would explain a front differental problem (driving 80 in 4hi). So I went outside and shifted it back to 2hi. The sound went away. 2 days later, the sound returns. The 4x4 is really funky. It won't shift into 4hi or 4lo smoothly. It takes some rolling forward and "messing with it" to get it engage. The Midas guy checked out wheel bearings, said they were fine. He said the front suspension was solid. He suggested front differental problems as well. Is it differental? Is it something else completely? What is going on here. Thanks in advance.