if it were an electrical issue, such as the wiring harness got disconnected/broke/screwed up, then you'd still have 2nd gear....
If you were "rocking the car" going from reverse to drive while trying to get "unstuck", then you might very well have sent the tranny into the "afterlife".
Sux, and I'm sorry to say..but Jamie is probably right.
And the estimates you've received are probably "pretty close".
When my 95 tranny crapped, I saved ALOT of money and got a low mile 1998 LSC transmission, which comes with alot of the required upgrades.
I got the trans and installed it for less than 500.00
{100.00 of that was FLUID)
I wouldn't spend ANY money rebuilding/repairing a 1993-1997 4r70w as they are known to "crap again" in very short time due to many issues with those year transmissions.
Look around for a 98 Mark 8 trans, you wont be sorry in the end.
you'll come out cheaper and you'll have a better transmission than you would if you rebuilt the one you have.