He could try rotating the upper shaft manually with the engine off and the transmission in neutral. If the coupling is coming loose, there is probably going to be some free play. If the coupling is OK, it should be pretty solid.
If the trouble is there, I wouldn't expect the noise to be much louder with the cover off. So I guess it is on open question whether the louder he is hearing is enough louder to prove it is from inside the transmission.
So far, we haven't talked about whether there could be a noise source related to the PTO. I'm assuming this whole situation is going on with the PTO turned off, which eliminates most things PTO related.
I'm inclined to think a chip is imbedded in the oil slinger gear.
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