My friend E30dood on this site is taking the automotive transmissions section of his mechanics training right now actually... You might want to shoot him a PM for an opinion if you'd like to figure out what happened.

Unfortunately, rebuilding it is probably the most expensive route for you to take. Spec R is right too, auto to manual conversions aren't cheap either. Simply replacing it will be the cheapest route for you to take.

Call a few yards and check craigslist and partstrader. You might possibly find an auto tranny for less than the one you found on Ebay. Regardless, the tranny will need to be dropped and reinstalled whether you replace it or repair it. Labor will unfortunately be kind of pricey...but if you have any desire to do it yourself and you have tools, you might be able to save a bit. Best of luck and if you have any questions, let us know.