Toyota Repair: 1995 Avalon P0770, metal particles, transmission failure

Question
I have a 1995 Avalon with 128,000 miles on it. The check engine light came on, so I took it to a tranny shop and they found a P0770 Solenoid Malfunction code, so they replaced the E solenoid. The code was cleared, but the light came back on after driving about 75 miles. I took it back, and the shop said it needed a new transmission. I chewed on the $2650 estimate they gave, and while I was driving around, the light went off by itself. It sounds and feels like it's shifting just fine. The overdrive light went on and off by itself a couple of times, as well as the light that indicates that a signal bulb is out. Right now, there aren't any trouble lights on, but they're intermittent. Does it sound like it really needs a transmission? Could it be a wire loom short circuit, or something else I'm not thinking of? If so, how costly and/or difficult is that to fix?  

Answer
The PO770 code indicates that there is a malfunction with the torque converter lock up system, this is normally caused by transmission failure which is starting to deposit metal particles throughout the transmission, these metal particles will clog up the solenoids eventually, so the choice is yours, replace the transmission or trade it in while it still runs.