The gold colored material you found in your pan is brass & is critical. A small amount of gray powdery material would indicate some clutch wear & is acceptable after 10-20 K miles, but brass is hard part failure. I had a 700R4 that made the same noise you described & I traced it to low fluid pressure. The pump was good, but a servo valve seal was dumping the pressure & caused catastrophic failure. It's too late to check pressure on this trans now, but when your mech rebuilds it, get a 0 to 175 psi fluid guage & check the press (the test port is on the left side of the case) before you put too many miles on it. If it's not showing 125 psi + or - 15 psi depending on fluid temp, take it back because it will be prone to failure like this one.