I am responding to an old thread that I started, but I want to finish the story.
I bought a new disk and installed it and then installed Arch 64 bit there. While using my 32 bit install later, I mounted the new disk and opened it in Thunar and heard the crazy scraping noise. No question that this is a software issue NOT a hardware issue.
The new install works beautifully! I am using Openbox now which I may end up liking even better than Xfce. I unzipped a 20 MB archive and no sound. I ran now an import of a 330 MB SQL dump. It also ran fine and the disk was completely silent. As a matter of fact, thus far everything is quiet. Finally.
I now see:
$ free -m
total used free shared buffers cached
Mem: 3821 3193 627 0 76 1894
-/+ buffers/cache: 1223 2597
Swap: 0 0 0
I.E. I now have my full 4G (total before was 3271).
Seems whatever it was, it is now fixed.
Thank you to everyone who helped.