Grinding by the Wheel Well

My ABS and brake light turned on and then I started to hear a grinding sound coming from my front driver side wheel well. I got it towed back to my house and took off the wheel, caliper, pads, and rotor but nothing looks bad. I test the brake to see if the calipers are coming out and they are. When I spin the hub there is a slight grinding sound and the drive shaft still spins as if it was in four wheel drive, even though I had it in neutral. Any thought on what this could be? :att: