Has anyone heard a sound like this before?

You might put a little grease on the Bendix shaft and work it in so it slides easier.
Now why did it only touch in one place, not all around? Possibly the flywheel is not quite straight, or more likely the teeth are unevenly worn.

Unless it’s in a very warm climate, dry graphite is a better lubricant.

The advice keeps coming. I love it. I think I just knocked the bendix gear out of alignment when I attached the starter. I was more careful the second time and there was no interference. Then I ran it to get oil pressure and the starter reset itself appropriately. The flywheel was checked and resurfaced, but I assume there must be some differential wear on the teeth. Odd that it would all be in one continuous arc though. I’m just happy I did not have to pull it all apart. Thanks again. I might have gotten it running, but the old battery gave its all just to get oil pressure.

Happy to be proven wrong, great that you found the problem, I had a noise on my XJ40 that sounded like a fractured flex plate, purchased a used one and had a local trans place R & R turned out it was just the pinion not retracting as the noise was still there after the job was done, they found it out when they started the engine while the car was still on the hoist and they saw sparks fly from the ring gear.

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Glad you found the problem there. Just to add - nice to see the correct H8 sandcast carburettors on there! I put them on my C-type.