Saw,
  Obviously, a clunk can mean any number of things depending upon the
severity of the sound.  In my case, the clunk on my 1988  XJ40 was caused by
the top of the rear shock snapping off and the shock running free.  In the
case of a friend of mine, the rubber insulators had disintegrated on his
1992 XJ40.
   Most likely it is just the rubber finally giving way.  It will happen to
the front as well.
   The best thing for you to do is remove the shock assembly. It is held on
by the arm at the bottom and 4 bolts at the top. It is an easy removal.
Mark the position of the top of the assembly with paint or some other
marking so you can re-align the assembly during re-install.  Also, it is
possible by twisting the assembly to remove it without undoing the hub.
SHOULD you undo the hub in order to facilitate the removal, you will have to
replace the nuts that secure the hub.  These are Helix nuts and can not be
reused.
    The shock/spring assembly comes out as a unit and once out, you can
visually inspect the assembly.  Any further inspection, however will require
a study set of spring compressors.  It is not a difficult job to do -- but
certainly a pain.

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