Welp, it's official! First problem on my new classic car.....but as expected.

So today I was moving it and went to start it and there was this loud grind. I turned the key off and tried again and it fired right up. I had a car that did this before and I was told a tooth may be missing on the flywheel. Starter won't engage so it makes this aweful sound.

Doing some searching I see the starter could be bad or the "bendix".
It's a crate motor with about 10,000 miles on it. New trans as of 2 weeks ago. I can't imagine it would be a flywheel problem or even a starter problem.

It's only done it once on me so far.
Any suggestions??

 

For lack of more testing I would go with starter... On occasion the starter has a small ejector on top of it and that pushes the gear in to the fly wheel. It is suppose to have a hesitation before cranking the gear and I mean a split second.. You say you don't drive it a bunch and not starting it much those things can get stuck. For a second it sticks and then the gear turns and slams in to the flywheel and the teeth don't mesh so it spins against the fly wheel. Terrible sound but not much of anything since its not engaged. Long term the bendix (ejector) can go bad and booger things up by not getting the teeth in all the way. I would not worry much about it happening once, try starting the car every Saturday for a month and see if it happens again... The second issue could be starter shims or alignment. It might be close and hits most of the time but maybe off just a hair so you insert a shim. You can pickup shims from most autoparts stores and Summit racing...

 

Thanks Icecobra!
I'll keep starting it to see if it does it often. Just did it 3 times and it started fine each time.

One thing I noticed which could be related but maybe not. While under the car I noticed there was oil on the starter. I had maybe 7 drops of oil on my floor. I traced it back to an area below the sparkplug closest to the firewall (passenger side).

Maybe the backside of the valve cover has a small leak, dripping down onto the starter and some how affecting it. So for now I am trying to source this small leak.
Could be distributor gasket, valve cover, or I read there is a small hole that is supposed to be plugged near the dipstick and a lot of crate motors aren't plugged.

 

Starter gear to flywheel/flexplate gear mesh is either too tight or too loose. Either way will make a grinding noise, different in tone, but I can't hear it from here.
If mesh is too loose: shim between the starter and block at the outboard bolt (if you currently don't have any shims), or remove a shim if yours already has some.
Mesh too tight: shim under both bolt mount points.
Here's how to check the starter:

 

Great video, thank you.