Well, you'll never guess what I found today when I opened up the cover and took a gander down into the transmission.
Apparently the gentleman that put this trans back together got a few things missing and backwards. First the washer that this drive gear sits against was missing. Additionally the gear itself was put in the opposite way.
You can see where the chain was literally scraping against it. The gouge marks are incredible. I'm surprised the chain actually held up. There was just no clearance for the chain to get by.
No doubt this is the sound that I was hearing (at 25 too....)
Gonna head to hardware store in the morning and see if I can't find the right sized washer. I'll get this thing rolling real nice now.