Grinding Shearing Noise, Please Help

Background: Bought Certified Preowned 2007 Prius in December with 39K miles on it, now has 44K miles on it.

Problem: Two days ago after a heavy rain I thought I heard the brakes squeal a bit at low speed braking while leaving work in the parking lot, heard nothing else till pulling out of driveway this morning, and heard another small squeal. Made a mental note to investigate later.

On the way to work while driving at about 45 mph (dry sunny conditions temp 39 degrees) all of a sudden a grinding, metals on metal shearing type noise occurred. It sounded like the pad was touching the disc lighting and was "scuffing" or something. I pulled over immediately and the noise did not change till I came to a complete stop.

I got out walked around looked at all the wheels, under the car, front back and sides, saw nothing dragging or indicating what it was. Got back into the car put it in drive, let it roll forward, more noise, braked, more noise till again I came to a complete stop. Got out and shoved the car a little, looked around again to see if anything like jostled loose, nothing etc. repeated rolling forward, awful grinding noise resumes.

So I shut off the car left it off for 1 minute, turned it back on, put it in drive and voila, magic no noise. Unfortunately this obviously did not make me feel better as clearly it was a problem with the car and definitely not something dragging on the ground because simply powering up and down would generally not dislodge anything.

Took it in for service right away and they found nothing. Told me I must have been dragging something, no answer to my feeling fairly confident I was not in fact dragging something. So I'm turning to you all. You guys seem to have answers for everything, but I couldn't find a similar topic on the board so Please if this sounds familiar to anyone HELP!! The warranty will run out in 3-4 months (based on current driving mileage) and this is not something I want to pay for if it recurs.

Thanks!!!!

 

I did not notice the car pulling.

Would a stone have dislodged by turning the car on and off? Would a scuff/damage from a stone be visisble on the rotor?

 

The noise started at 45 mph.
The little squeals I heard weren't too concerning really but they were new. I drive the cars 90 miles 5 days a week and have since december, I feel pretty used to its quirks, but this was a quite sudden and relatively dramatic noise

 

It seemed as though it was coming from the front and I do not think braking felt any different