It sounds like it is just the normal clunking you get when you turn a wheel in 4wd. The front tires are trying to turn faster then the rear tires, the surface is not slick enough to let the front and rear turn at the same rate. Slip differentials and lockers are used to keep this from happeing, unfortunately, none are made for front independent suspension.
As for the fact that the repair person has only seen it one other time, I have another simple answer for that. He has only seen it one time because 90% of SUV's never see 4wd, let alone 4wd low. No one knows what four wheel drive low is used for, so they never engage it. And as for the percentage, 90% of SUV's are never used offroad. You figure that that 10% who may just attempt to put their vehicle in 4wd low, will be the few who experience this happening, and even some may understand already why it would happen. Spread that 10% (or less) across the country, and you will find that very few mechanics will have been asked questions about such an occurence.
4wd low is not really meant for situations like soft dirt and grass. In such situations, 4wd high can keep you vehicle in control just fine (And even 2wd can as well), but you can still get some cluncking on turns. What 4wd high can't control, usually 4wd low is the best thing. When you are forging deep water, going down a snowy hill (Put in 4wd low and idle down the hill) and other such extreme situations where you need more traction then just 4wd high.
As for the lurching, I haven't heard about that and I would have that checked.
Hope this helps.