HS-1RP with 20Haaspower Haas vector drive.

While orienting the spindle, after it oriented i noticed the spindle was vibrating back and forth a tiny bit and made a loud audible vibration noise from the transmission like gear lash. The RPM meter showed it bouncing around from 0~10 RPM trying to maintain 0 speed. If i grab the spindle nose by hand and put a little load on it while oriented it will push back a little and stop vibrating and hold its position. Ive been chasing a severe spindle noise and i think i may have eliminated the bearings which left me to the tranny or motor. But im starting to think the problem might be a bad spindle encoder. With the tranny running only in high gear the tranny noise is worse at lower RPM's, once you get over about 2500RPM it still makes a lot of noise but it smooths out a bit. I know from past experiences with bad axis encodes on most CNC's they will usually start to vibrate when they hit a bad spot or just make a lot of growling noise as the axis moves as the motor oscillates at high frequency.

Does this sound like an ecoder issue or more like a problem on the spindle drive itself?