Apparently when the torque converter disintegrates, it sends metal through the transmission which ends up destroying the transmission control module and the pump/pump housing. The fix is a new torque converter, preferably a "billet" torque converter which is thicker and more heavy duty (Sonnex website says the issue is the thin wall of the factory torque converter flexes).
Another problem with the factory transmission is there is a weld on the 4-5-6 drum that causes a weak spot. A good rebuilder will replace that drum with an aftermarket one.
It's kind of sad that I'd prefer a rebuilt transmission over a GM rebuilt transmission, because I don't have any confidence that GM won't put the same (new) crappy parts in.
I dropped the pan on our escalade and it actually didn't look too bad. There was slightly more metal than typical, but not a lot more. But it was shifting weird and my wife said it lost power once, so she has lost confidence in it. I put new fluid in it and it drove fine, so we seem to have caught it on the early side.
Definitely worth it to call around as prices vary widely:
- Local transmission shop where they rebuild it (including drop/install), was $6000 to $7500, up to 3 yr warranty
- Local shop that installs a rebuilt (elsewhere) transmission, $4500, 1 yr warranty
- Local shop that installs a "value option" remanufactured (elsewhere) transmission, $6245 OTD, 3 yr warranty.
- Transmission shop in Atlanta sells rebuilt transmissions (rebuilt in their shop) for $2000; will install for $700, fluid is $150. Total $2850, 1 yr warranty.
So it looks like I'm driving to Atlanta, as their price is cheap enough that it'd be hard for me to install a rebuilt transmission myself for that price (especially considering I'd have to take it to the dealer for programming). I could rebuild it cheaper myself, but it's too much of a time commitment for me. If you set an appointment, they'll do a same-day install for out-of-towners. The rebuilt transmission includes a billet torque converter, an aftermarket 4-5-6 drum, and some other upgrades.