Welcome to the 'club. They are nice cars, aren't they?
Definitely not normal behavior for the M42 though. It can't really be the trans or diff, they're just two meshing gears...strictly mechanical.
Mid-range bucking is usually due to misfiring. It can be caused by a bunch of different problems, but I'd start with the easy stuff. How old are your spark plugs? How old are your wires? Have you checked the plug wells for oil? The cam cover seals can fail and let a little oil down into the plug wells. Moisture can collect down there too, but it typically dries out pretty quickly.
The other problem that can cause RPM-dependent bucking is a bad AFM. They're not the easiest thing to repair, it's usually best to find a buddy with a similar car, and swap stuff out until you find what's causing the problem.
You can also try the "stomp test", since our cars did come with a very rudimentary OBD system. If you do it right the car will flash the CEL to report problems. Google it, there's lot's of online guides.