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This guy is a friend of yours? Did you know about these issues when you bought the car?

What you should do depends on a lot of different things. When you say that your friends know about transmissions, do you mean that they've built a few successfully? If not, then that's probably not a good option. The problem with a junkyard tranny is you don't know how long its going to last. People are gonna jump on here and tell you not to be a cheapskate and invest in an expensive tranny. This would be a good option if you have the cash or you plan on modding but i'm guessing that 2k for a tranny isn't in the budget. Your best options are to pull the tranny yourself and take it to a local shop for a rebuild. This option should cost about $700-$900. Another option is to get a used tranny from a car that you know ran well before it was pulled. This option will run you around $300. You already know what a junk yard tranny will cost and the "friend rebuild" cost. If your friends really know what they're doing and/or your willing to deal with the drama of the rebuild not going well, this might be your best option. Having said all this, the only options that will bring any kind of warranty will involve professionals and a lot more cash.
 
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