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I have an 02 expedition that has AWD. When I first take off in the morning it has a grinding sound in the front and when you turn side to side it seems a little worse. So originally I was thinking it was a wheel bearing. The only problem is that when you get a few miles down the road it quits. Any guesses?
I know it's not the same exact vehicle, but when I was over in the desert I drove an '03 Expedition 4x4 and it made some wierd grinding noises in the front end after sitting for a while, especially in the A.M. (it was always in 4WD, so in effect it was AWD)
I Didn't notice anything hurting performance-wise, I think it may just be the front diff. and all that junk getting up to operating temp and then it settles out.
Maybe you just notice it up front because you can actually hear it, maybe the rear end does this too and we just can't hear it, or maybe I am way off here...