For anyone following along... I FINALLY have the transmission job in my Focus done.
It only has about 10 miles so I'm still a liitle nervous to say its ALL good but good so far!
I was right with my initial guess. Something broke loose inside the bellhousing and battered the torque converter and bellhousing.
The case of the transmission had 2 puncture holes in it. 1 presumably an exit hole. I can't find whatever made the holes.
The used unit got new seals and seems to have a tiny bit of leak happening. I am hoping the new seals will seat and create a better seal over time.
1 cooler line was relaced by previous owner. They used heater hose.

This is very NOT THE RIGHT F'NG HOSE for this application and so needed replaced.
The seals, filter and gasket done with 4 or 5 qts of fluid. That was all there was to the trans part of the job.
Plus it got a new starter that came bare metal so I painted it before it went in.
I got a check eng light becaus the MAP sensor wasn't plugged in all the way(connector is broken).
No more lights and shifts better than before the job started!
I'm thankful that I did the work myself. This would heve been pricey at a shop
but it took WAY too long to get this damned job done! It just wouldn't finish!