OD light / tranny problem?

I need some advice with a 94 probe 2.0L auto which has a flashing OD light. I have read a couple of threads posted on this forum but just need conformation. When I put the car in drive it slips, as I give it gas, it slams into gear but wont shift up until high rpms. If I press the OD out switch the car moves no problem but no 4th gear (might slip alittle during shifts). Took to dealer for diagnostic ($90) and they found VSS error and claimed clutch slipping in 1st gear and getting better as you shift up. Slipping clutch according to dealer requires NEW TRANNY$$$$$$$$:screwy: then they will install new VSS. Old posts here lead me to believe I need to replace VSS ($150) and PSS($75) to repair car, NO TRANNY!( parts are dealer special order so dont know if can be located) The car has 165K miles and tranny was rebuilt by dealer 3 years ago(100k mileage) I am not going to put $2000+ into this car but $500 to get a couple more years out of it would be nice. Thanks for all thoughts.

Assuming the position
rectalprobe