[BarryGMC]

Dang a whole post written then splat. Dead like a bug. The clutch spins at say 2000 rpm and the bearing is at 0 when the two touch there is some slippage. This is normal and causes the polishing you see. The noise you described sounds more like a cluster gear problem. These little 3 speeds are not to robust and when they get a bit low on oil things can go haywire. Now you need to visualize the load in, float ,and deceleration load. Each makes a distinct sound. So do the problems. It's like a loose rod bearing in an engine makes most noise in the float. It rattles. Not so much under load in and out. Now this is why you always look at the oil when you drain it. A bright light is helpfull. Does it look really dark? Or is it metallic looking? And if so brassy or silver? These things tell you a lot. You need to investigate these things. Maybe look at a drawing of your trans to help visualize what is going on in there. And no this thing should not leak. If it was mine I would open her up and at least check it out.