Transmission is grinding

Without the model number it is hard to say. The motor wont make a sound like that. IT is most likely the transmission.

Is the knocking sound when the car is moving or sitting still as well? Does the grinding sound happen just as you put the car into reverse or does it keep grinding?
These transmissions are very problematic, especially if they are not properly maintained. The most likely candidates are a cracked flywheel or a broken drum inside the transmission. Either way, it sounds like the transmission will have to be removed to pinpoint the problem.

The engine does not usually grind. It is most likely the transmission. When a transmission grinds it means that it is unable to shift properly, a couple of things that can cause that are the cluch needs to be replaced, or one of the gears is stripped.

need a new clutch.

If it is grinding you can just get new sincronizers for it,You may have a bent shift fork.

sounds like transmission is damaged, sure its not a transfer case or rear axle ?

Your transmission is the most likely issue. The internal gears are starting to grind. This is typical of this particular model. (manufactured by Admiral) There is a possibility that the pump pulley has come loose and is grinding on the unit's frame or pump housing itself. If this is the case, it can be fixed at a reasonable price. If it is the transmission, start shopping for a new machine. The transmission replacement is not cost effective.

pray for a no trany burn

bad throw out bearing

Has the transmission been serviced? A transmission oil change and lubricant additive may help, however, it sounds as though you have a 3rd gear synchronizer going bad. Verify the shift linkage is not worn and is secure at the shifter and transmission be for spending any cash. If the linkage is good and the fluid change does not help after 150 miles, you might want to visit your favorite transmission shop.
Good luck and let me know.
Regards,