Thank you all for your advice.
I spoke to a atv mechanic last night and he said, based on my observations, to check the rear differential.
And would ya know I happened to have metal chips in the almost non-existent oil in the diff. So after knowing this I have come to the conclusion that I need a new ring and pinion, which is only a hundred dollar or so fix. I appreciate all your advice and suggestions.
I'll keep everyone up to date and maybe will have pics coming soon