Transmission Dead?

Recently, my automatic transmission (4L60E) started to whine in my 93 Jimmy. The person I bought it from had recently got the transmission rebuilt in it. Not sure how long it had been since the fluid was changed. So I changed the fluid and filter, checked fluid level, ok. The whining went away and transmission performed better than it had since we had purchased it. A couple of weeks later we got in it to go somewhere and it had a loud grinding sound coming from under the hood. Checked a lot of things and in the process noticed that the fluid was overly full in the transmission. Took it to the cheverolet dealer shop and they told me it was the alternator making the sound and they had also got a diagnostic reading that the 3rd gear in the transmission was out. Brought it home and changed the alternator and drove it around for a little while. It seemed to be sluggish while taking off and in 1st gear, but was better throughout the rest of the gears. Although, still shifted smoothly. Upon returning I checked the fluid level, there was still to much fluid. So I drained the fluid out to level it to the correct level again. Took it for another ride and it shifted great and full of power. My wife got in it this morning to go to work and when she put it in gear it had no power. She revved the motor while in gear and it would barely move. She had a hard time getting it back into the driveway. Checked the fluid level and it still had to much fluid. I had assumed that when the alternator went out it had given bad readings in the transmission electronics. Is the transmission toast? Could it have a plugged vent or drain back hole? Any help would be greatly appreciated. :banghead:

its sounds like some errors made and i would like to think that it was not the guy you bought it from. if he can prove by receipt that it was overhualed than the noise should have been there before you bought it and there should have been some warranty on his behaft.
the torq convertor will drain back into the transmission and your dipstick will read high. once you start the motor it will reload it selve and your dipstick will read nomal which is full if it is not on the full mark then add till it is.
to double check this. is to get someone to hold the brake on and put it in drive and agaian check the fluid level the level should bee very close the same if not... your clutches are worn out or your torg convertor is no good.
I hope this helps if not its toast.

The transmission needs to be at operating temperature with the engine running to get an accurate dipstick reading.