2000 Chevy S-10 Code 1870

Took auto back on 11/09 for oil change and all was well (trans fluid checks). However, for about 6 months I have noticed that when shifting from 1st to 2nd it is jerky & at times seem like it does not go into overdrive. Just this month the "Serv. Eng. Light" has came on twice and I had it read. Code is 1870. The RPM bounces in overdrive. Most of the time the auto runs great. Took it to Dealer and was told needs new Trans. The next week took it to Mr. Trans. And was told Torque starting to fail and now I have a rear seal leaking on Trans. And fluid was low. I have read the Service Bulletin 01-07-30-023B which states the cause may be due to wear in the control valve body. Mr. Trans. Said that fixing the control valve would not fix the problem. Please help. Do not know WHO to believe. Should I take it to another shop and see what they say. Most of time car drives good except the RPM's go up and down frequent.