That's the clutch throw out bearing losing contact with the pressure plate springs... and grinding. As g-man mentioned, on your '87 the bearing is held in constant contact with the pressure plate springs and is supposed to spin continuously whether the clutch pedal is depressed or not. If the bearing starts binding OR the clutch hydraulic the slave cylinder spring doesn't apply enough pressure, the contact surface on the bearing will lose its grip and start grinding the springs. The contact is only smooth metal on smooth metal, so it doesn't take much internal friction on the bearing to break the grip.
Usually that symptom (grinding throw out bearing) happens when the car is cold in the morning and the bearing's internal lube hasn't warmed up. Usually once it gets hot, the bearing loosens up and the bearing can then grip the clutch tangs without slipping.
What To Do:
DO NOT lubricate the contact surface interface of the TO bearing to clutch springs with anything. Don't spray anything up there. Lubricant will only make the symptoms worse. You want the bearing contact surface to grip the springs, not slide on them. It's the sliding right now that's causing that noise.
Replace the clutch hydraulic slave cylinder with a brand new TOYOTA slave cylinder. Don't use any other brand. Aftermarket slaves have been known to have weaker springs which can cause your problem.
When the T.O. bearing is making that noise, fully depress the clutch and just hold it down for several minutes while the engine is idling. The faster the idle the better. Then when you get bored of that, apply light pressure on the clutch pedal just enough to stop it, but not so much as to put pressure on the clutch. Keep your foot lightly in the pedal for as long as it takes until the sound eventually goes away after the bearing heats up. Applying light pressure on the bearing assures that it's spinning, and if it spins long enough (with the proper slave) it should ease up and spin more freely. The key word is "should"
You might have to drive around for a while with your clutch foot lightly resting on the clutch pedal (but not engaging the clutch) to allow enough time for the bearing to heat up and spin better.
This is usually a symptom of disuse and old bearing, but I've had a brand new Toyota T.O. bearing do the same thing for several weeks (not as loud as yours) until it finally loosened up.
If you can't get it to stop making that racket no matter what you try after a long period of time-- might as well just let it grind until you can eventually replace the clutch stuff. It doesn't matter if it grinds & grinds if you're going to replace it anyway. Because once the transmission is dropped all the clutch components get replaced anyway, so ground down spring tips won't make any difference anyway.
