Transmission/axle seal leaking (2001 Solara)

[Mike Kilo Niner]

So I bought a 2001 Solara SLE from used car dealer. The leather is in excellent condition, it drove smoothly, and just had a few interior trim issues (passenger side door frame cracked, center console latch tweaked, vanity mirror hinge snapped). The mechanicals looked great, so I drove it home. The next day, literally as I'm driving to the emissions test station, the check engine light comes on. I curse under my breath, and spot an Autozone. The clerk pulls the code P0420... catalytic converter. My web research into this problem leads me to this site (woo hoo!), and the dealer offers to pay for an aftermarket universal catalytic converter.

Sure beats $1,400+ for the OEM part, even with potential O2 sensor issues. I drop it off with the "experts" at Meineke at the end of the day -- they'll weld on the new cat. conv. first thing in the morning. The next day I get an ominous voicemail... "we have some news about your Toyota." Evidently it leaked "about two cups" of transmission oil overnight from the front right axle. He quotes me $178 to replace the transmission/axle seal and says he can have it ready by early afternoon. Okay, I can deal -- it's an older car, and the seal was probably about shot. Over lunch it occurs to me that as long as they're taking apart the axle, they might as well replace both seals and I pick up the phone to ask how much more it would cost.

"Oh, hi!" the manager says, "I was just about to call you. We have some news about your Toyota." "We tried to take the axle off, and it won't go." "We're looking on the internet to figure out how to put it back together" "so you can take it to a Toyota mechanic."

They're trying to figure out how to put my transmission and axle assembly back together?

Luckily, I have an excellent mechanic not too far from where I live (but too far from where I bought the car to have him check it out, sadly), and his wife promised to squeeze me into his schedule sometime Monday. Once the "skilled professionals" at Meineke get it put back together "first thing tomorrow morning, for sure" , I'll take it home until Monday. If you've actually read this far, here are a couple of questions:

1. If it's really leaking a pint every twelve hours, should I even be driving it at all (very short distances -- only 3 miles to my mechanic)?
2. Is it a good idea to replace both axle seals at once?
3. Anything I need to watch out for (apart from the pool of transmission oil forming underneath my car even as I type) in terms of other possible problems?
4. They tore apart my transmission without knowing how to put it back together? That inspires a lot of confidence...

Thanks for any advice you have to offer. Hopefully, once I get this problem resolved my biggest problem will be deciding between tan duct tape (to match the leather seats!) or a new door frame trim piece.

Cheers,
Mike Kilo Niner