I had a feeling it was the pulleys making the noise, but I just haven't to check them out. I think I'm going to go SS route to make things easier. Definitely gonna check those cranks out but just remove the derailleurs. I don't want to sell it because A) I doubt I'll get much out of it, and B) This wont be a bike for serious or long distance use so I don't care about the fit. I do my serious cycling on my road bike. I just have to read up on how to convert everything. Seems simple enough from what I've been reading.
Side note, my handlebar is very stiff. The stem auto centers itself and handing on this bike can be fairly sketchy at times. Think this might have to do with the headset bearing?