The present disclosure is directed to a system and method for protecting a rotary machine in a high noise environment. In one embodiment, the method includes a step of measuring a vibration signal during operation of the rotary machine. Another step includes modulating the vibration signal at a desired frequency to generate a modulated signal having a direct current (DC) value. The desired frequency varies as a function of an operational parameter of the rotary machine. The method also includes a step of filtering the modulated signal via one or more low-pass filters. Another step includes comparing an amplitude of the filtered signal to a threshold amplitude for one or more components of the rotary machine. The threshold amplitude is indicative of an imbalance within one or more components of the rotary machine. The rotary machine is then operated based on the comparison so as to protect the rotary machine from damage caused by the imbalance within the one or more components of the rotary machine.