Steering wheel goes loose, then locks?

Sounds like the steering rack came apart. The grinding sound you're hearing is the pinion gear slipping past the shaft inside the rack. That would also cause the condition you mentioned where there was no control and the car felt like it was swaying. Check the steering rack and see if the housing is broken. Have someone turn the wheel while you listen under the car (engine off) to see where the noise is coming from. My bet is the steering rack.