Tai-Pan

Last week my LS400 starting making a horrible groaning noise. At the same time the A/C dashboard light started going on an off. I turned off the A/C system and drove home fine. Popped the hood, tried it again, and I got the same noise. A little online research suggests that the light flickering means I need a new compressor.

Ok, but here are the parts I am not sure about:
1) No one ever described that kind of a noise
2) When the car made the noise, it started to pull forward hard, as if the transmission was affected
3) Put a cheapo gauge on the A/C low-side port and is showed the pressure was off-the-dial
4) I tested it after it sat for three days and it seemed to work. However, I only let it run for a minute as I was afraid I might be sending metal shavings into the system.

Do I need a new compressor or am I missing something else?

Also, this is a '94 with 130,000 on the clock. Dropping $1k to have everything replaced makes no sense. Heck, $500 barely makes sense. If I replace the compressor and nothing else, how much longer can I expect the system to function?
Thanks!