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The problem goes away when you moved things around, great! Again not an expert so just guessing. Might be the high/low shift mechanism. Could be binding up in two gears at once, high and low. Maybe there is an adjustment or bend shifter part.
Ask the dealer to check it out. If the problem, ask them to explain what lead them to believe it was the torque converter. You seem to have described the problem OK, wonder why the dealer want in the torque converter direction. But find out what the problem is first before questioning their handy work. Might just be something else, but sounds like a transfer case gearbox problem now.
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