When driving the gears don't catch on and it just revs with no real power?

What is your question?

I have a VW Jetta 2004 GLS 1.8t and just today I took it out and suddenly it wouldn't want to switch gears or "catch on" above probably 1 or 2. It's a tiptronic so I tried manually switching gears and using the hill settings at 2,3,4 to no avail. It would just rev really high with little power. Nothing's been wrong recently. On the way home the check engine light came on. More Details: The engine code was P0733. Also my mechanic had to put about 1 quart of trans fluid in but now the car shifts fine. But he said to watch it and see how it goes. Engine code came back at P0732. Not verified but Aamco said -> Trans computer good. No electrical problems but burnt transmission fluid (or so says mechanic).Says probably mechanical -> rebuild transmission $2500. Does this sound about right?