Hi again,
Take a look at this thread.
http://www.poolforum.com/pf2/showthread.php?t=9455

I still don't understand why a new valve would have that problem and really have no further advice at this point. Per that thread you can maybe diagnose the problem further. On the pump rotor not spinning freely......lot of friction somewhere. Only places are the impeller itself with something wrapped around the shaft or the bearings. I assume you broke things down far enough to rule out impeller issues. Bearings would tend to make a grinding noise when they're about to fail. You may want to take the motor apart further to isolate the problem(s). I should also mention that no part of the impeller should touch the pump housing. The clearance between moving parts is small but there should be no physical contact. I could imagine the pump chamber deforming a little due to overheating and causing the impeller to contact its housing but that's grasping at straws so to speak.
Al