A new, rebuilt, tranny can be $1-$2K, but you also have other problems. Over heated engine once, new radiator which has problems after install (tranny fluid in overflow), and questionable mechanic expertise. The 850 is a nice car but it does have a weak tranny. You might want to consider a newer 97-98 model which has a slightly better tranny.
If you get a rebuilt/used tranny, look for a 97 850 tranny.

Klaus
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98 V70Rawd(108Kmi), 95 854T(88K mi), 75 164E(173K mi)

Answer bepends on what was found. $600 sounds cheap if tranny shot. But you had a few things going. Need more detail to give advice.

What have you been told you are getting for the money?

How long have you had the car and what do you know of its history? When my tranny went at 287,000 miles I spent the bucks to replace, but then I don't think I could have gotten a replacement car in as good as shape as mine without spending really big bucks. I've had it since 124,000 miles and have taken good care and know its quirks.

And second opinions are always good (depending on the mechanic).