I agree, 3rd party (like the shop where I work) will be much cheaper than Tesla in terms of doing a drive unit rebuild/replacement. I would argue however that the milling noise could have a damaging effect of the motor
eventually.
The milling noise is a direct result of wear of the rotor and/or primary drive gear bearings. With excess wear, comes excess play, which can cause accelerated wear of other items, such as the rotor splines, and especially the rotor coolant seal. If the rotor coolant seal begins to leak, the coolant could permanently damage the motor and/or inverter beyond repair which is of course a much more expensive repair, and not to mention could leave you stranded with zero warning.
At our shop, the most common reason for drive unit rebuilds these days is actually due to the coolant seals failing, and not nearly so much milling noise (in later motors, they switched over to ceramic bearings which mostly fixes the milling issue, but they also changed the coolant seal to an inferior design that does not last). A full rebuild is $4,000, assuming the drive unit is in "functional" condition and can be rebuilt.
If we were to do a full overhaul at the shop where I work, we would:
-Replace rotor bearings with upgraded hybrid ceramic bearings
-Replace primary drive gear bearings
-Replace rotor coolant seal with an upgraded triple lip PTFE seal
-Inspect all parts of the drive unit for excess wear (splines, gears, etc.)
It is possible to swap in another used drive unit for probably about the same amount of money, but by doing so you are swapping in a unknown part. If the replacement drive unit ends up with a failed coolant seal, or develops the same milling noise issue 10k mi down the road, then it could be a lot of money spent for nothing. That's why we rebuild every motor that comes through our shop, regardless of whether it "seems" good or not.
I HIGHLY, HIGHLY recommend that
ANYONE with a Large Drive Unit equipped Model S should check their drive unit for internal coolant leakage at least once per year,
especially if you are out of warranty. For anyone who is near Vista California, we can perform the check free of charge at our shop (just make to call ahead first so we can make sure to have a lift open). For those not close by, here's a video on our shop's YouTube page on how to perform the check: