response from tranny builder
Tony, those pics are pulling up small on my computer...but I don't see any
reason why it couldn't be rebuilt. It looks like a spacer or snap ring
behind the reverse gear may have failed allowing the reverse gear to move
around on the mainshaft causing it to melt that bearing cage in the pics.
From the pics, I'd say worst case scenario you would need a new mainshaft,
reverse gear, and bearing kit on top of the normal rebuild. The metal on the magnets is really nothing to worry about I
wouldn't think, but I'd know more if I were looking at it in person. I
definately don't think it would be more that $2500 to rebuild and thats a
lot less than $5000 the dealer wants. If we couldn't rebuild it for some
reason we'd probably still give you a couple hundred bucks for it to use
as core parts. Let me know.