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When will my auto die?

Hello All (especially tranny-meisters!)

I believe my auto ('81 4k 2.144l) is on its way out.  I have been led 
to believe this by a) the mechanic telling me so and b) the following 
symptoms:  fairly loud whining in first (not the diff) particularly 
under full throttle and on changes, surge/lurch on changes 
particularly under full throttle, a tendency to wait a little before 
engaging reverse particularly after a bit of work - I drove it a 
continuous 400km finishing with a climb up to a ski resort and when I 
got there the delay had doubled, and the mechanic reported that there 
was quite a bit of friction material in the pan.

My question:  in what way will this thing die, and how long might I 
have?  I have competing priorities for the next $1k on the car 
(shocks, exhaust) but these others aren't going to leave me stranded 
all of a sudden.  I might be mistaken, but the car seems to be losing 
power, and there seems to be (at least below 2500rpm or so) a 
tendency to feel, well, slushy, i.e. I can rev it up and down by 
nearly 1000rpm in top without a whole lot happening to road speed.  I 
know that's what slushies are all about, but my last auto, an old 
Dasher (similar trans I thought?) was much more responsive, and I 
think faster off the line (even with a carb) in that something 
happened at the wheels *before* it had revved itself silly.

Is it really degenerating, and what should I do?