I have a '96 F250 Diesel PowerStroke with about 130,000 on it. Recently, the overdrive light started flashing and it started shifting hard. Last night I dropped the tranny pan and replaced the filter. There was a ring of metal particles (small ones, about 1/4 in. thick) stuck to the magnet. Otherwise, the fluid looked good and didn't smell burnt. I put it back together and added a can of TransX with the new fluid. It seems slightly better but is still shifting hard and the light is still blinking. Any ideas?

The local mechanic is quoting $3000 to put a rebuild in it. He hasn't even looked the thing over. He just decided it needed a rebuild based on what I told him. The nearest Ford dealer is about 90 minutes away. What would you all suggest? I appreciate any help you folks can offer. Thanks!