I'm sorry to say this, but it sounds like the transmission is on it's last legs. They tend to lose reverse and start to make bad noises when they're about to die. Be prepared, this is going to cost between $1000 and $2200. Or you could find a junkyard transmission and do it yourself if you can. 
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'88 Pathfinder: 6" of lift, 33x13.50 Swamper LTB's, Rancho 9000's, L&P Stage 3 steering system, K&N, Pacesetter headers and 2.5" exhaust, Lock-Right locker, 110A alty and electric fan swap, dual batteries, 700W+ worth of PIAAs, etc.
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