Originally Posted by cbhirner

Its not as complicated as ya think. i had the same issue. its a wobbly freewheel. not like a bent axle where the freewheel wobbles while coasting. the teeth were actually crooked on the freewheel body. the noise you hear is the chain sliding sideways back and forth when the angle of the teeth changes. you can back pedal and make it stop for a time until the downstroke realligns with the wobble then it starts in again. the good news is it doesnt really hurt anything if ya keep it as is. personally i just put on an new freewheel. 10 bucks at amazon and your good to go.
Cheers!