If I had to take a stab at what was wrong, over the net it is really kinda hard ya know, I would have to suspect at the very least a busted Forward/Direct drum assy and damage to the forward clutch pack. This is seems to make sense to me since you had the car at a high rate of speed just the day before. Why? The fordward & coast clutch assy had numerous design changes over the years because of this problem, premature failure to the forward & coast clutches while driving at a high rate of speed for extended periods of time. It was not until the `98 model year that FilterTek got a holt of the filter and found that it was a starvation issue and redesigned the filter.... problem solved.
Would it be worth allowing the dealer to replace the unit for over $2660? As said before, I would shop around. Be prepared to have the other shop tell you that you will have to agree to pay a certain amount up front or taged on the end for them to tear it down and fully inspect the unit. Then you will actually be able to weigh your options from there.
For the same model year tranny, I had one rebuilt for $2200 and change! That included a ton of hard parts, including a new pump assy, reworked valve body, all new Kevlar composite clutches, all new sensors (it was a 94 case, so the solenoid block had to be changed as well), Forward drum assy, filter (which is not servicable since it is located in the center of the case, Mine is now a FilterTek), a final drive plantary gear and both front and rear roll restricters.
