First of all thanks for the quick responses and feedback guys, it's really much appreciated.
What I mean the clutch is disengaged and held is that say in stop and go traffic, the car is in first gear, and I disengage (push in) the clutch. Sometimes the car will simply grind at any particular time. As soon as I take the tranny out of gear and release and disengage the clutch again, the noise goes away.
As far as shimming, the tranny originally had a shim when the car had a spec stage 2 clutch (not McLeod, sorry typo). However, I had a excellent mechanic who installed the Monster as well as new slave/(comes with new throwout, correct?) who measured slave distance and said the shim was not needed. Additionally on the Monster website it claims no Monster clutches require shims. Also, the setup wasn't doing this for at least several thousand miles so I don't believe it's that.
I also read it is possible that the slave can push the pp too far causing it to grind on the flywheel, but I don't believe that would also explain the tranny shifting noise as well.
I just tried putting it in gear and revving the engine but got nothing. Rev'd it to 4k 3 or 4 times and got nothing, car did not move forward one bit.
If the pilot bearing doesn't make noise when fried and the clutch setup is good, the only thing I could think of is the tranny is shot. However, I couldn't begin to think why the tranny would make noise when not engaged by the clutch and sitting at a stop in traffic, plus it had a stage 2 (or 3?) rebuild by a professional shop 55kish miles ago.