Your problem is not unique; infact quite common to the daysailer. Here is how your board is configured, (see link), a description of what has likely gone wrong and how to fix it.
The board has two lines attached to it. With the board up, you can actually get under the boat and see a nylon line that enters the centerboard at the front end accessible from under the boat. This line has a knot at its hidden end and is epoxied into the board. It will likely be intact, and not be the source of your problem. This line runs up the front edge of the raised centreboard and exits the centerboard trunk into the cuddy through the topmost hole, up to a set of blocks, down to the front of the cd trunk and through the cuddy bulkhead to the cleat at the side of the cb. This is the downhaul line.
The wire that is giving you the problem (metal grading sound) is attached at the top back end of the raised centreboard and runs forward along the top edge of the cb, then turns DOWN towards and through the lower front hole of the centreboard trunk, to a single block on the sole of the cuddy. Here it attaches to a 2:1 block assembly with a nylon line which runs back through the cuddy bulkhead and then the cleat on the cb trunk. This is the uphaul line.
This is likely what has gone wrong. When the cb is lowered using the nylon downhaul, the uphaul wire is slack, and if it is too slack may fall off to one side of the centerboard. When the cb is down, where this wire is attached to the cb with a metal tab, it is at the top rear. The wire should ride the top edge of the cb and stay taut. If it is slack however, it may ride to one side. Remember that the uphaul hole is forward and down from this position, so as soon as you pull on the uphaul, the wire will now be pinched between the cb and the cb trunk rather than riding the top of the cb. This is the metal grating sound that you hear.
The simple fix, if you can get away with it, (ie. this problem has not been happening for long so the cb is still smooth...), if the board is stuck in the down position you can try to fix it with one person under the boat to move the board left or right, [this can be done from one side with your feet] and the other person pushing the uphaul wire near where it inserts into the cb trunk from the cuddy.
If the board is in the up position, have someone push up on the back of the board from underneath to cause the wire to be slack. From inside the cuddy, what you want to do is to push the wire into the hole so that it again rides UP above the top edge/rear corner of the cb. You can then rotate the wire left or right so that it again rides the top edge of the cb. You will know when it is in position, because a slight pull on the uphaul is effective in moving the cb back, if it is in the down position. If you are trying to get a fix with the board in the up position, you will know that the wire is riding the top edge of the board again because there will be no grating sound and the uphaul assembly will take the load of the board when the person underneath stops pushing up on the back end of the cb.
Once you have got this fix accomplished, adjust the nylon line which is common to both the uphaul and down haul. You will note that it anchors on the cuddy floor on the left of the mast. Shorten it here so that the whole apparatus has limited play, only enough slack to cleat the line on the cb trunk. This snugness may be enough to prevent the metal wire from riding well above the end of the cb again.
If this does not work, (usually because the wire has ground the edge of the cb for a long time and caused some wear) then open the inspection ports on either side of the cb trunk on the cockpit sole and undo the two 3/4 inch nuts (you will feel them about 6 inches forward of the inspeciton ports) that hold the cb in place and lower it from underneath the trailer if possible, or careen the boat and anchor the mast down and do this operation with the boat on its side. (Some models have the cb pivot bolt held in place with two wedges instead, If this is the case remove the wedges to release the cb) You will have to regelcoat any damage to the cb, possibly straighten out the kinked wire, or replace it if it has pulled out of the tang. Check for any damage on the inside of the cb trunk as well, and repair any damage there. If there is a huge gap between the cb and the insides of the cb trunk, owners have been known to add shims about 12 inches in diameter to both sides of the cd held in place with the pivot bolt to fill this void, where the wire wants to go and grind! It is unlikely that this is your problem however as the wire is only 1/8 inch thick, and is grating which tells me there is only an 1/8" of space there.
See this link for pictures of the cb system. There are two pages of pictures. Look for the cb rigging scheme pic.
http://groups.msn.com/RogerConrad/shoebox.msnw?Page=1