KC59vette:
I feel your pain. The same thing happened to me. I bought my 1995 for what was a REALLY good deal, then 2 months later the transmission locked up. $2500 later I now have the thing running good, but it made it just a "regular" deal. Hearing how quiet the new one is, there certainly was a bad bearing in the original one but I had nothing to compare it to when I was buying it so I thought that was just how they sounded.
There is a guy in Tampa that has a business called "White Racing Products" who rebuilds the ZF's for the ZR1 racng guys. I drove over there to exchange mine for a rebuilt one (with the correct input shaft for the LT1). He apparently did a really good job because the transmission works great, but they just cost so much. I was thinking of buying a Richmond a the time, but it was another $800 or so, just shy of being worth it.
-Dave