So i've got a nice new KMC 1/8" chain a 34t surly front ring, 17t rear ring, proper 'surly' singleator and whenever I put any sort of load on I get a really nasty grinding clunking noise from the back end. It's a new chain and a 2nd hand sprocket so i'm thinking it could be worn teeth on the 2nd hand sprocket causing the chain to miss/skip? Anyone else have any thoughts?

Check to see if the chain is rising onto the top of the teeth on the underside of rear sprocket when under load.

You should be able to see by hanging off while pedalling.

Should I be running a 3/32" chain with a shimano screw on freewheel?

that should be fine. probably the sprocket is a bit more worn than you realise. so long as it doesn't skip teeth it'll all quieten down after a bit.

Is your chain line right (ie do the sprocket and ring align properly and is the chain straight)?

What kind of setup do you have at the back.

If it's a screw-on freewheel, is it an ACS one?

If so, they all make that noise after a while. Just ignore it – it's harmless.

mine just started doing this with a new chain (same model) but eased off after some hard riding, I put it down to chain stretching maybe?