Remove the belt and try to spin the pump and transmission pulleys by hand. If any one of them binds or makes a grinding noise, it'll be pretty obvious. If the transmission pulley works in one direction, turn it in the oter to see if it works as well in that direction. Post your findings.

Probably a worn thrust bearing; not allowing full release of the brake. Try to spin the inner tub by hand. If you can't budge it, the brake is still in good shape. Here's the part number for the thrust bearing kit: Part number: AP4009132

OK, I replaced the thrust bearing - it was easy - and it still makes the same exact noise. I took the hoses off the pump and there was no obstruction. Can not see anything in between the tub walls. How do you get the tub out and how do you take the agitator off?? I need to fix this problem. Is the trans on the way out??

Well, I took the plunge and took the agitator off and the tub out. Had the machine apart. The grinding noise is coming from underneath the piece that holds the tub on with 4 hex heads in it. I can not access it without taking the entire machine apart. Is that the trans bearing that sits under the tub hub or is it a upper spin bearing? I would have to take the whole trans out. Is this worth fixing? It had some dirt/sand/rust around the hub . Is it possible that the sand and dirt got into the bearing? Anyway, I put it all back together and it spins very, very loud but it still works for the time being. So $60 later and 8 hours of time researching and working on the washer yields no results except that I know how to take it all apart and put it back together again! I gave it the old college try, but it was not meant to be. I guess I will be buying a new washer pretty soon!