That terrible grinding noise is never good. It might just be rust grinding off the clutch surface if it hasn't been used in awhile but not likely. Remove the belt and see if it spins by hand smoothly. The car is old, it is probably leaking and should be checked properly for leaks before buying anything. It would be best to replace the compressor and clutch together along with the dryer and some new freon.
Its prolly not gonna be cheap. If you cant handle fixing it all at once just cut the belt off, roll the windows down (and take the top off if your in a targa!) and save your money for gas.
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