[gsjohnson]

As Peter stated previously, the grind you feel when shifting to 2nd gear is that your catching reverse just for a moment as you pass by the reverse gear and it grinds as a result. That's why you didn't find any second gear damage when you pulled the trans apart. The damage is occurring to the reverse gear...probably minimumly. This is usually a result of a misadjusted shifter coupler. A common symptom with 901 transmissions. Remove the coupler plate. Place your shifter in the neutral position, loosen the coupler clamp bolt, and move the shifter towards the driver all the way while still in the neutral position. Then move the shifter all the way to the right while still in neutral. Tighten the coupler clamp bolt and then go thru all the gears while standing still. If everything feels like it should, road test your vehicle and see if you have eliminated the grinding noise. Take your wrenches with you on the road test, so you can fine tune it with the coupler while your on the road. It took me three tries and 10 minutes before I got mine just right. Hope this helps.