2005 Pontiac Grand Prix Odd Steering Wheel Noise When turni

When turning the steering wheel left or right a it makes a noise like a light scraping noise. Similar to scraping a piece of paper on a desk or corduroy rubbing together. The dealer first said they need to take off the steering wheel and lubricate a rubber boot inside the steering wheel. They did that and it didn't work. Then after further inspection they said the noise was coming from where the steering shaft goes into the steering gear case and they would have to replace the steering gear case at a cost of $900. They said the condition isn't dangerious. They are going to give me a $60 credit for the repair that didn't work. Now I'm not sure they know what they are doing and I wan't to make sure this isn't dangerous. Of course I'd like to get rid of the noise, it is very irritating.
Thank you for any help.

I should add that when the car is cold there is no noise. It is August in Michigan so I don't mean that the car is below freezing - it is just that the car has not been running. After just a couple of minutes of run time though the noise starts and never goes away. Also the dealer checked the wheel bearings and ball jounts and they are fine - so they say.