Sounds like you have a bad release bearing to me, at least.
The trans popping out of gear is probably caused by a failed shifter seat and bushing. Basically, when they go bad, you never really get it all the way into gear, so it's easy for it to pop out. I'd replace that $20 worth of plastic before you go buying a new trans. Shoot, you don't even have to remove the trans to fix that...
HTH,
Ryan
