Replace/ rebuild engine and tranny?

[airstar1199]

I've been reading info on this forum for about a year now and it's been very helpful (thanks). I finally decided to sign up because I've got a couple of fairly important questions that I need help with. The car's a 1999 XC with about 135K miles on it. It actually runs great except the stuff below. In the last year, I've changed timing belt/ water pump, front suspension, 3 motor mounts, had Victor rebuild the ABS module, the entire coolant system (including heater core and radiator) and other miscellaneous stuff. Here's the issues now...

1. It's been blowing smoke (oil) out the tailpipe. I didn't know this could be PCV until yesterday. I did a compression check, and all 4 are low (about 15-20 lbs) but even. I was looking for a head gasket leak but... We put a little oil in each and they came up to spec PSI. To me, this says the rings are worn.

2. I was backing up into my drive, hit a bump at the end and lost reverse. It literally felt like it shifted into neutral. I'm not a transmission expert, but I'd think a clutch would slip for at least a while before it gives out??? It did shift late and hard (through all gears) one time a couple of days earlier when it was cold-- but never before and never since. I did the drain/ fill/ drive/ repeat with Mobile 3309 a year ago.

So my question is, should I pull the whole thing and rebuild/ replace them both? Could either be something other than rings and clutches? I have no problem doing the engine rebuild, but I'd rather not if it isn't necessary. I've never done a transmission, but I wouldn't be afraid to start. Plus, I know two ASE tranny re-builders who would do it on the side pretty cheap. From the forums I've read, rebuilding the tranny is either very easy and idiot-proof, or shouldn't be attempted.

I have some time off coming up and would like to get this car going. Any advise would be appreciated.

Thanks,
Aaron

[airstar1199]

I see this is for 01 and up V70's. Sorry... I'll repost in the right place.