2005 X5 3.0i transmission fail when cold but ok rest of day

[aspenpup]

I have 150k miles on 2005 X5 3.0i. First symptom was transmission going into failsafe mode shifting from 1st to 2nd. If stopped/restarted, problem would return. My local indy read code that shows gear ratio error (not shifting) and said to replace transmission for $5500.

I took car to transmission guy. He replaced the 2nd gear solenoid for $200 and transmission stopped failing all the time but still fails in the morning. Took back to him and he decided to pull the transmission and rebuild all of the clutches. He did not notice any bad stuff in the fluid but did find some broken spring inside and stuck in one of the pistons.

Got car back and still have problem. The odd thing is that we get the fail when the car has been sitting for a long time (over night or sitting at work all day). We get the fail when going from 1st to 2nd (will not go into 2nd). Once it fails, it works the reset of the trip. If started up again after it is still 'warm', the transmission shifts ok.

Transmission guy puzzled by problem, especially since he found a physical problem during the rebuild. He assumed that something must be wrong with valve body so he replaced that under warranty (the rebuild was $2400 by the way). After valve body replacement, still have the same problem.

Any suggestions? Kind of weird that it will fail once but then be ok the rest of the day.