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You don't need a code to know that the time to rebuild is coming when there is metal in the pan. If it was shiny dust, which is normal, that would be different, but slivers means trouble coming. After the P0770 and you opened the pan and if you had found no shaving then it would probably be just a solenoid. However since you found shavings you probably have a blockage and a clutch is not engaging properly or dis-engaging properly. Either way it needs to be torn down and fixed. You might get away for while with a serious pressure flush and new filter, but that will not fix where the shavings came from and they will return and it will get worst so it is best to fix it now if you have the money. be sure to replace the torque converter when you do it.
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I don't think finding metal shavings in my pan automatically means I need to rebuild my tranny, and plus its not daily driver so I figure I can wait and see what happens. It shifts great no funny smelling fluid, and has never given me a problem. I have taken it to two different tranny shops and the toyota dealer and they tell me its operating normal, and until they or I can recreate the lockup that I have gotten 3 times in the past 3 months then there is nothing they can really do to diagnose the problem. As far as it not being the solenoid, I have driven over 1000 miles since I replaced the solenoid and the code has not come back.
My plans are to drive it around this weekend to get it to lockup and tow it to my mechanic.