99 4x4 suburban problems

This is my first time posting in a forum, I guess I've finally met my match. I have a 99 1500 4x4 suburban with the push button 4 wheel drive, 4l60e, np 246 and a 350. The vehicle is completely stock. The transmission gave out last year and I had it completely rebuilt by a retired gm transmission tech. A week ago my wife was driving it home and she heard a loud pop and immediately lost all gears forward and reverse. The service 4x4 light had been going on and off for a few days and it randomly kicked it into 4 high once so I assumed the t case failed. I pulled it and upon inspection I found a lot of shavings and and some of the plastic retainers in the bearings had fallen apart. I started the vehicle with the case out and when I put out in gear the tail shaft spun in forward and reverse. I installed a used t case and I still have no gears. Am I correct in assuming that the transmission is still good because the shaft spun with out a load on it or is there possibly something wrong with my transmission? Any insight would be much appreciated