Ruthann:
If I may ask, who this transmission guy? is it a local shop, or a chain like AAMCO or DANCO? Sadly, transmissions are a component that are ripe for people to be taken advantage of. The problem is, very few of us are trans experts, so we rely on what the "trans pro" tells us.
Once they have your trans out, and in pieces, they have you. At that point, you are into them for the R and R labor as well as the tear down, with no way to prove or disprove what you are being told.
The comment re a rebuilt not being a good choice is 100%BS. As long as the rebuilder knows what he/she is doing, a rebuilt trans can be as good as if not better than a brand new oem unit from the factory.
Case in point:
Years back when we needed a new trans for our '95 Caprice patrol car, the dealer quoted us one price for a new trans with a 3 year 36k mile warranty, and a better price on a Delphi rebuilt trans that had a 3 year 50k mile warranty.
Not every trans shop knows how to work with the Dodge 8 speeds, and some of them (dealers as well) won't touch them. They only want to pull the "bad" one, and slap in a new or rebuilt one.
Don