UPDATE:

Just came from the transmission shop, he said the trans is definitely shot. To rebuild it we're looking at close to $2500, give or take when its all said and done. He's also doing the transmission cooler and lines. I'm thinking I'm gonna go for it.

 

i would look into one of those viper or ramzilla trannys

 

torque converter, i had that problem. you should have a lock up converter. when it doesn't lock up the od light comes on and doesn't shift.

 

$2,500 seems top dollar, I'd at least check around a bit.
Also consider what you could do yourself to bring the price down, such as yanking the tranny yourself, which may or may not be within your capabilities, and may or may not void any warranty.
Maybe you can bring in some of your own parts and avoid the markup, there are a number of things you can do to get a quality rebuild and at least bring the price under $2,000.

 

actually that is the cheapest price in my area, of reputable places anyway. I called 3 places and got ranges from $2500-$3000, I went with this place because it was recommended and it was the cheapest. He's doing the cooler and lines too because I'm told they were clogged and more or less shot. He said went the trans broke down it clogged a line and caused the cooler to not function correctly, hence the overheating. I don't think its a bad price.

 

+1 it woud be around the same price and those are better than the stocks

 

Make sure he doesn't overlook the torque converter, probably gunked up as well.
Seems rather obvious, but it has happened before.
Guys get a rebuild, flushed radiator & lines, and forget all about the TC.

 

You should do what everyone says and spend a shiatload of money. After all, they are instant experts at what you can spend since they're not in your area and know all of the rates and prices.

I'm just saying....

 

Well...OP says thats the lowest estimate and its a reputable shop....just sayin' .

When I want a tranny done, I have found that the shops rep is as important than the price. Back in the day, I always worked on having a good raport with my tranny guy.

For the record, My tranny cost about 1800 oo out the door, with a new converter. Shoulda been easy to flush my cooler since theres no check valve, and I asked him to. He also installed my deep pan and didn't charge me extra for any fluid he used.
The shop was highly recommended by several people and I liked the guy and his attitude when I met him. The tranny runs cool and shifts firmly.

My last tranny was a 904 out of an 85 Van. It was 495 out the door, with a used planetary (mine went BANG) and a converter flush. Back in '99 the same guy quoted me 1500oo to do my 97 rams tranny (which hadn't died yet) and that was with a bunch of extra work.

I suggest the OP consider installing a shift kit, temp guage, larger cooler, and maybe a deep pan if funds permit, and in that order. Many guys are against this, but I recommend junking the check valve too.

See, I even spent more of his money...but I'm a salesman.

 

Last time I had a tranny rebuilt, was a while back so the pricing is not applicable, but the guy was real cool.
I asked if he'd mind if I hung out a bit and watched, he said hell no, I'd be glad to have someone to BS with.
So that made me feel better, the fact that he didn't mind me sitting there watching him tear my trans apart. He said he could tear one apart in his sleep, and from what I saw, he was barely exaggerating.
Of course, alot of shops have strict rules about no customers in the working area, and for good reason ,,, Plus most guys probably wouldn't want to sit there and watch.
I had some spare time, and desire to pick up some knowledge watching, so I did.
I would at least say, in advance, that you would like to see the replaced parts.