When I take off in 1st gear, at first there is a hard thunk in the rear end. After that all seems ok. Has anyone ever had this or know what I can do to fix it? How serious is it?

Excessive backlash in the gears or seriously worn out U joints resulting in excessive driveline play.

check the U joints for play, i had the same problem, and i had to buy a new driveshaft cuase i let it go.