$850??? OUCH!!!

You could have just got a used compressor with a working guaranty like I posted for around $40 after shipping and new drier for around $30-50. The compressor is only held on by 4 bolts and is easy to remove. Just loosen the belt, unplug electrical, and unbolt the 4 bolts. Even if you paid someone to install these, do a flush and re-charge you would have saved a bunch of money.

It's rare for the actual compressor to fail. It's almost always the clutch. Did they actually see metal shavings in the refrigerant or were they just assuming? I bet they just assumed. Shops will almost always tell you to replace the whole compressor. It's easier for them to replace the whole thing than just the clutch, plus they make more money.

What did the "grinding" sound sound like? Was it a metalic whine that corresponded to the engine RPM? Was is grinding, rattling, and popping?

I find it odd that you feel comfortable doing the timing belt/water pump yourself, but not these AC components. The AC stuff is by far much easier.