CV joint or transmission

I have an 1989 Toyota Camry Wagon V6-2507cc 2.5L DOHC (2VZ-FE), which started making some grinding noises in the front right tire along with the transmission slipping. While driving, the grinding noise grew loud and a snap could be heard, then I had no more forward motion, only RPM's revving on the engine while the car sat still. What happened?

might want to start looking for a new wagon seems like the trannie has taken the big dive. but if not its gonna need repair at some point if it was the CV joint that broke. all will probley cost more than the value of the car but those times where good times for Toyota reliability.

Yep. Tranny went kaput. I wouldn't give up hope. First check out all the external stuff like CV joints, and the splined parts of the axle shafts, but my guess is they're OK. Have some estimates done for a rebuilt tranny installed, and go to at least 15 places for the estimate. A place like Aamco might be a fair bet. They deal in volume but they are a little pricey. Skip the dealership completely. Try some small transmission shops since they will be able to diagnose the problem and maybe be able to rebuild your current box. Don't be afraid to try little mom 'n pop shops out in the country. Cheap work that is just as good as you'd find at a chain or dealership, sometimes better. My guess is that this whole thing can be done for under $1000.