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E36 - Grinding Noise in rear axle



     Hello,
     
     I have recently noticed a low pitched grinding noise in the rear axle 
     of my '93 325IA.  It seems to happen only during very slow turns with 
     the steering wheel cranked to either side (generally happens when I'm 
     circling parking lots) - It also happens perhaps more loudly when I'm 
     going in reverse.  Could it be the rear differential? The sound goes 
     higher in pitch when I go faster, but stops completely when I stop the 
     turn and head in a straight line!?
     
     I'm heading in for "Inspection 2" pretty soon and I'm still under 
     warranty (47K miles) - has anyone experienced this problem?  I would 
     like to have an idea before I go into the dealer so I can pin them 
     down on fixing it, rather than trying to convince them that there is a 
     problem in the first place.
     
     Any help would, of course, be appreciated.
     
     Thanks
     
     Arya Barirani
     Chicago IL
     1993 325IA 
     
     PS- 
     I'm new to the Digest, and except for a few posts, I find the mailing 
     list to be very rich in content.  Keep it up.