rmckenna,
It is most likely the flywheel. I had the same problem you describe on my wife's '00 Expy. I had read a post on cars.about.com which said that this sounded like a flywheel problem. So I took the starter off. (I don't know much about visually inspecting a starter -- it looked ok and it turns the engine over, so....)
So when I had the starter off I inspected the flywheel, and sure enough several teeth were ground down more than 1/2 through. This was in a couple of different sections of the flywheel -- the bad teeth cause the starter / flywheel teeth not to engage properly, thus causing the grinding sound.
My local mechanic, which I implicitly trust, recommended a shop (my mechanic doesn't deal w/ any transmission issues, & you have to drop the tranny to replace the flywheel). When I called the shop they said they had seen this flywheel problem on several Expy's, and on MANY Navigators (pretty much the same vehicle). So it is a common problem. He didn't see any causes or associated failures, other than possibly the starter going bad too -- but not always.
Look for a reputable shop you trust. The total cost, both parts and labor, to replace the flywheel should be less than $400 (dealer wanted ~ $1,000
).
P.S. I ended up going to a NAPA AutoCare Service Station, for what it's worth (I have no affiliation whatsoever).