Are you sure you have the rear bearing seated correctly?
If you hear grinding, this is the perfect clue you need to see when you disassemble it. See where it is rubbing, and make an assumption based on that as to how the drum is misaligned. For example, if the rubbing is occuring on the top part of the rear of the machine, you can assume that the drum is either too high on the front or too low on the rear. Find out what is causing this.
Make sure that when you reassemble the dryer face that the felt doesn't fold on itself. This will cause a misalignment, and it is not hard to do this step incorrectly.