I'm a tranny guy at a GM dealer.
Yes, sounds like the reaction sunshell took a dump as stated above, I've replaced lots of them! The splines will strip inside where it slides onto the reaction sun gear.
Fairly easy to change once you get the transmission out. A lot of people are afraid to open transmissions, digging in and changing a part you know has failed isn't all that bad, hardest part is getting all the clutches to index on reassembly. You just have to keep messing with them and they'll go in.
Once you get the trans on the bench....
Remove torque converter, then trans pan, 13mm bolts.
Disconnect TCC PWM solenoid and remove it. (closest to bell housing end, right in front of the TCC solenoid which has two no plug, but a red and black wire going into it, large coil, and 2 10mm bolts holding it in place) It can be tricky to get the clip out of the valve body, need a small pick at just the right angle, and be careful, hold your finger over it when it starts to come because once they go they'll go flying and you'll never find them.
Remove the 2 10mm bolts holding the TCC solenoid in and remove it.
Remove the bell housing. You need a T-50 Torx+ socket
Remove the orange seal on the input shaft.
Remove the 7 13mm bolts that hold the oil pump into the case. There'* a special tool to lift the pump out but if you're real careful you can pry up gently between the pump and the case to brake it free and grab a hold of the stator shaft with a rag, a little wiggling and jiggling it should come out.
Disconnect the 2/4 band from the anchor pin on the case, located at 6:00 position when looking in from the pan side.
Lift input housing with the reverse input housing out of the case as an assembly
With small snap ring pliers, get the snap ring off the output shaft inside the reaction carrier. This one can test your patience! If you have the tranny on the holding fixture facing tail down make sure you have someone hold the output shaft or it will fall out on the floor or your foot when you get the ring out.
Remove the reaction planetary set, then remove the reaction sunshell. Check the splines on the reaction sun gear, usually a good idea to replace it eventhough it usually appears to be ok.
Reassemble in the reverse direction.
The hardest part like I said above is getting all the clutches to index when putting the input housing and reverse input housing back into the case. Rotate and wiggle the input shaft back and forth and you'll feel and hear them gradually drop into the case, you'll hear an audible clunk when the last one goes in. If you put the pump in and it doesn't sit all the way down all the clutches haven't indexed. Be sure to put all the thrust washers and bearings back in place, keep track of everything as you take it apart and keep it in order and you should be fine.
Parts you'll need:
-Reaction Sun Shell
-Reaction Sun Gear
-Oil pump gasket
-Outer pump seal
-Stator shaft seal (the one in the center of the oil pump, where the torque converter slides into it.
-Input shaft seal
-Pan gasket and filter
-Approx 10qts of fluid
-Transfer case adapter gasket if it'* 4x4.
Hope this helps. Wish I had some pictures of the process, it'd be easier to understand. I'm sure you can find some pics online somewhere of the above steps.