The sound is NOT teeth grinding

[Ness]

I think this is probably one of Frictional Games trick to put terror in the game.

Put a sound that will be scary but nobody can tell what this sound REALLY is (because it has no equivalent in our real world) and then you have everybody wondering what it is and getting paranoid over it.

Maybe I'm putting too much confidence into FG's work, but if I'm not and that's what you really intended when making that sound, I have to say that it's brilliant.