Welcome to the Forum! I wish I could help you out, but I'm not a mechanic. How does it drive? Do you trust your mechanic? There are bearings that can go south, not only in the tranny, but all over your Jeep. I say ride it out if it goes down the road well, or get a second opinion. Also, my 04' doesn't have a "4 wheel drive" indicator light, but trust me.... You'll know when it's in!!
good luck with your TJ!