Am I screwed?

[Mustang Sally]

Jan of 2005 my dad got a transmission (rebuilt) from XYZ. It came with a 12 month 12,000 mile warranty. ABC installed it. They had also rebuilt the motor.

Two weeks later my dad took the car into XYZ because the transmission was not shifting right. The car also did not have the get-up-and-go like it use to. XYZ shortened and adjusted the throttle cable.

10 Weeks later he took the car back to XYZ for the same problem.
They replaced the cable with a stock Ford one.

October 2006 the overdrive gear went out. I phoned XYZ they said it sounds like the cable is out of adjustment or needs to be replaced. (sixty dollars replace, forty dollars adjust)

When I phoned to see if the car was ready the guy who answered the phone said the transmission is shot we need a new one and to call back and speak with the service manager.

The service manager said he would like to see if there is something else they could do to fix it without having to replace the whole transmission. This went on for a month. Every time we called they were doing one thing after they got done doing the other thing etc. I kept a log, and wrote down pretty much everything he said each time. He wanted me to think he was trying to save us money.

When it came time to break the news to me he had me on the phone for an hour, explaining...........He (XYZ's service mgr) went into "vague" detail about what was done to the car on which time it was in their shop. He was jumping around clearly trying to confuse me as he explained, "throttle pressure".
He said because the car was driven with low throttle pressure it had caused wear on the clutches and that

Seems like you might want to go to small claims if he was not being truthful with you...