torque converter from the sounds of it...but that grinding sounds alot like a broken diff. easiest way to differentiate between the 2 is to simply drain the fluid out. if the fluid has metal shavings in it, you know its either A( the tranny gears shearing, or B(the Diff Gears Shearing, either way its not a good sign.
now i dont know much about auto transaxles, but i have rebuilt a few auto transmissions. and i have known torque convs. to make grinding or popping noises on occasion.
and alot i have read has said upwards fo 3K for a rebuild.
you have a PM.