Thoughts on frustrating situation.

Contact warranty company before another dollar goes to dealer. Advise them as to what has already transpired. With any luck you will get a knowledgeable person on the other end, not just a call center.
They should authorize the repair/replacement of transmission be it new,reman or used.
In some cases owner pays for the work and is reimbursed for the cost less the deductable.

dealer bought it at auction, with free check engine light illumination. He cleared it,no-his tech cleared it and is trying to avoid any responsibility.

most shops do not honor any aftermarket warranty,its on the policy holder to make the claim. Best of luck.
If its a legit company and a legit claim it should be no problem.

Dealer isnt being very professional at this point.