[87Skier]

If it's moving 1/4" then you have some problems.

i had a similar experience to yours where I thought something was wrong with my transmission because I couldn't figure out where the noise was coming from and found that when I turned the driveshaft by hand that the transmission squeaked. The squeak turned out to be nothing, and the issue was actually a u-joint. I guess when I checked them that the brake didn't hold it and it rolled against the park pawl so it appeared tight.

The 1/4" movement is probably because the output shaft snap ring has broken. This is allowing the shaft to slide forward or backward and probably ride against something. The output shaft snap ring is about 1/2 to 3/4 of the way into a teardown. You will need to remove the valve body, pump, and input drum at the very least to get to the parts.

Not sure if you are planning on rebuilding yourself or taking somewhere, but at the point you can get to the output shaft there isn't much reason to not just rebuild the entire thing.