With no load on the wheels, the transmission will freewheel enough to spin them. It's normal.
Now the grinding noise. Is the clutch new? Does it grind when the engine is off? Does it grind only in gear, not in neutral? Is it only when starting off?
Hurt your motor? No. In the absence of the knock sensor signal, the ECU pulls timing (instead of aggresively keeping timing right below the knock level through use of the knock sensors).
It will run just fine, but power is going to be down.
Until it dies ;)
Also the load on the electrical system is very high, it's not going to be any more efficient than a factory setup. Drag cars that run off batteries only it would be great for.
Can also jump the wires on the connector on the underside of the steering column. More than likely it's the contact that allows the steering wheel to turn. Do the other buttoms on your steering wheel work?
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