Sounds like the drive block may be breaking apart. You'll need to remove the agitator to inspect. Should look like this. Usually what happens is the inner circumference wears and the grooves no longer engage the tabs of the drive tube which causes the basket to slip making the noise and destroying the drive block. There's a video at the link above showing how to replace it. You will need a spanner wrench to get the tub nut off.

Eric