First of all, DO NOT REBUILD this transmission. If the contamination was so bad from the disintegrating diff that it lunched everything else, there is no guarantee that even the most conscientious cleanup job is going to fix it. I learned to overhaul M/Ts very early in my life because a bonehead dealership mechanic didn't thoroughly clean things after replacing a synchro. I was replacing shaft bearings one at a time over a three-year period, naively thinking every time that "this one" was going to be the last.
I would be most concerned about bearing seating tolerances, esp. around the diff races. Also, I'd have reservations about selector assembly bushing slop and fork wear since these are mild bearing surfaces that don't have published specs for wear tolerances.
Given the high miles on yours, if your dealer finds a clean used transmission with under 70K miles, go for it. It should last the remainder of the no-hassle life of the rest of the vehicle.
The quotes are a touch high overall since a transmission R/R should take a pro about 8 hours, with $100/hr a typical shop rate. Backing into it, they're charging you ~$1200 for the labor. (Actually, that's somewhat reasonable. A high-mileage vehicle like yours will have hidden issues, so we need an additional four hours' allowance for cuss-word time.)
This all said, I'm scratching my head at what would cause the problem in the first place. That's a pretty major cascading failure for something not especially known for it.
