I worked as the "manager" (means salesman) in a reputable Transmission shop for a while.
The Loss leader free tow and diagnoses are common ways to get your vehicle into the shop. It should have been pointedly explained that if the repair was not done at this shop they would not be free but I know that repair order had it in the small print. Another Loss leader is the cheap oil change. A less than reputable shop can use that as an excuse to bill big $ for an un-needed repair. By the way a trans oil change should cost between $50 and $100 PLUS oil, filter and gasket.
Loss leaders are a BIG red flag. Good trans shops don't need to use them, in fact most good shops have waiting lists, only a few days but a wait.
Good shops make a point of laying out step by step and detailing what exactly things will cost at each step and the hidden things like the billed if not repaired at our shop.
The over the phone diagnoses (broken snap ring) is a HUGE red flag, no reputable shop does this, the most that should be said is it "may be" a minor repair, never ever quote a price.
Finally when the shop I worked for got into a dispute like this, first we recommended if the customer was feeling pressured because we had the vehicle that it go to another shop of the customers choice, at this point we were not going to make any money and there was another car waiting for repair so why deal with someone who thinks we are ripping them off.
If we got accused of being dishonest it became a case of you no longer have a choice we box your parts up, charge you the fee agreed to at this point and once we are paid, as a good will gesture, paid to have the car towed to the shop of the customers choice. (Yes we paid for the tow).
What I believe is the largest North American chain of trans shops tracks Their shops for rip offs, complaints and dishonesty, does Mr Transmission?
I hope the above will help others to avoid the rip off artists out there.