Well my second thought was the band slipping. I know when you shift manually, the band reinforces the shifts. And, since the band releases into third gear, I eliminated the band as the source, because, I still had the noise into 3rd gear. That's when I went to investigate my first suspision. Believe me SoTx, pulling the trans was last on the list. Thanks for your input. TT, There was a guy that worked in the bay next to me.
He had a K1500 towed in with the engine locked up.
He never pulled the serpentine belt off to try a breaker bar on the crank pulley. He just went & ordered a short block. Put it all back together, same thing!! I suggested he try turning the engine over without the belt, engine started. Turns out the alternator was siezed. Condemning a major component is usually the last thing on my list, unless circumstances dictate otherwise!!
Thanks again guys.