It won’t be the distributor or the spark plugs. If it happens when you turn the key to the start position to crank the engine it could be the starter solenoid.
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It's not a problem with the bearings, there is something else wrong, perhaps with the axle as your mechanic has suggested.
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By locking in third gear it’s going into ‘limp home’ mode, probably because the computer has identified an electrical problem with the gearbox. A diagnostic check should identify the fault.
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The Ford Falcon 1997 prices range from $2,640 for the basic trim level Sedan Classic to $22,880 for the top of the range Sedan Gt.