88 XJ40 Torqe Convertor Noise

Hi, Our 88 XJ 40 VDP has developed a loud buzzing noise, kinda like a bearing or a power steering pump thats out of fluid. Its worst upon start-up, and makes an "out of round" (like a warped rotor) rubbing noise briefly, but gets better after warm-up. Even so, it will still buzz loudly when going slow or upon gear-change. I traced it down using an automotive stethescope, and it is loudest at the torque convertor, so I suspect thats the culprit. The transmission is full of fluid, and it doesnt have that many miles since the last trans. fluid/filter change.. Was wondering if anyone had any experience or ideas with this. Thanks, Nathan