Thanks again for all the responses.
G-Force, I'm going to drain the oil, and check out the engine after I rule out accessories, and trans/clutch failure. Warranty wise....well we all know that there is no warranty with something used, especially like this. But, the guy that I was in contact with on the purchase was selling it for his friend. They all had them, and his friend didn't want to mess with selling it. Anyway, I knew up front that he made $1,000 profit from selling it. He gave me that back. I had to drive all the way back that night and get it, but I have it. He didn't have to give me anything. He was a good guy.
ODdave, yes I was going to buy a truck from Dennis. He is a great guy. He is still emailing and calling to help me fix this one that I didn't buy from him. I don't think that it is going to be a converter problem either.
gimpyrobb, I agree with you. I'm going to check the "free" stuff first. Others had mentioned putting the t-case in neutral, and turning the short shaft while trans is in gear. I will do that. I also don't think that an accessory could lock up the engine while trying to drive, but possibly at idle. I had taken it out of gear and was idling the engine when it rattled really loud and locked up.
Westech, yes I checked the oil on the pre-trip. I have also looked at the oil level since the this happened. It is full, and very clear. Looks like oil straight out of the jug. It is supposed to only have 2 hours on it, all from me driving.
OK, well once again I really appreciate everyone's help and responses. At this point I just need to do some work on it and I'll report back with what I find. I'm sure most of you guys will be interested in knowing what caused this.
I'm leaning towards:
fluid out the bell is from trans being over filled, or a plugged vent
all of the smoke from under the truck was from the belts
locked up generator or air compressor
(leaning this way because of my fiance saying it smelled like burnt rubber)
or
clutch smoke and a junk transmission or clutch assembly
It may turn out to be the engine, but that wouldn't explain why there was so much smoke coming from under the truck. It had completely fogged out my fiance that was right behind me. I could only see the smoke and her headlights. If it were a rod bearing, I would think that it would have given done more than made a bunch of noise for 15 seconds and then locked up. I haven't even looked, but if the belts were smoking that bad, I'm sure I would be able to see glazing or chunks on them now.
I am also going to look to see if anyone has adjusted the pump. I will be installing an EGT gauge and a boost gauge anyway, just for reference.
Thanks again!
I'll let everyone know. It will be a day or 2 before I'll have time to get back out to where the truck is.