Howling autotrans, HELP!

[John Karasaki <johkar@teleport.com>]

When it rains it pours!  Car #2, my daily driver, our wagon has failed me!
Driving around doing energy audits today in the 90+ F heat and the suddenly
the RPMs shoot up and a high pitch whine started.  Fortunately, I was only a
couple of miles from home.  My partner lives near me (about 6 blocks) so I
dropped him off and ask he could get his car and pick me up.

The wagon almost didn't start moving forward again.  Very, very loud whining
now from the AT and finally moved forward until I got home.  I called my
mechanic.  Not good.  He suggested that I top out the AT fluid and hope for
the best.

Well, I just got back from doing that and driving around the neighborhood.
Funny, it starts out fine then within a few blocks the AT starts howling and
a quick step on the accelerator will make the RPMs shot up but will not move
the car forward!

Is this a "shot" transmission?

Options:

1) Sell the car.  It has a few quirks (don't they all) but is in great shape
cosmetically, with euro lights, 15" TSW stealth wheels, new tires, etc.

2) Pay ~ $1000 for a trans rebuild.

3) Buy all the 5 speed parts (used) I need for around $150-$200 and roll up
my sheeves. 

Has anyone done a 5 speed conversion?  The wrecking yard guy thought that
some cutting and welding of the clutch cable guide through the floor or fire
wall might be needed.  Is this correct?  Or is this a straight forward bolt
on conversion?

HELP!

Regards,

John Karasaki

The Karasaki's, proud owners of AUDI automobiles

1981 Coupe
1982 TQC
1984 5000S Wagon
1990 V8