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When you say "Top of third" is that the 2-3 shift point? If it's at the shift point your front band might not have released soon enough causing 2-3 overlap but the damage looks a little excessive for something that should have just destroyed the band. When I was overlapping my tires would lock up and actually chirp going into third. It wasn't a chirp but a skid for a brief fraction of a second then third would engage. So I'm guessing your front band didn't release and locked the trans between 2-3 but that's just a guess because your tires should have locked up first. If that's the case you're lucky you lived through it.
In my head I'm trying to go through the physical movement to decide whether 2-3 overlap would do that to your drive shaft though. Maybe after another coffee I'll be able to figure it out.