There is no way I would take that trans back to that guy. He wasn't trying to save you money, he was trying to save himself money. I would be in a rage if I paid that much money to get it back with problems, then to hear, oh I didn't think it was that bad and I was trying to save money. Basically, that's his way of saying "yeah I know it was effed up, I didn't feel like taking the time to fix it, so I was hoping you wouldn't notice"
Good luck with it man, but I would stay away from that guy. Who knows what else is in that trans that should of been fixed/replaced and wasn't...