John,
I have heard this noise a few times, but the worst was fairly recently. I had put back together my 1975 Kenmore 70, which I had scavenged from the back lot of a used appliance store. It was missing the console, motor, transmission, and pump, but they had left the basket drive attached to the basket and just let it all hang there. It was about 1995 or so when I hauled that washer home, but 2009 when I put it back together.
I sourced the proper pulleys for the motor, gearcase and pump, and when all put back together, I expected the usual KM/WP quiet pak near silent machine. NOT!!!
That basket drive was either the reason the machine was scrapped in the first place, OR, it dried out while sitting for 14 years. The thing sounded like an anxious water buffalo in heat! Just like Paul's machine actually.
I took the basket drive all apart, and experimented with cleaning and re-lubricating the pulley. It is tight on the spin tube and not wobbly, but it still is not right. I was going to swap a new drive into the machine....so you think I should try your suggestion and simply goober some more turbine oil into the lower flange area of the spin tube?
G