I'm not saying ATF wont do the job, however all my reading says the stuff doesn't meet the specs to properly lubricate this type of tranny. I'm open to some more info and some technical proof. However, in OP's case, its too late. Once that bearing is bad, thinner fluid wont do anything. Heck thicker fluid cant save it either.

OP... what's the mileage on this transmission. Your signature says over 300k, on the original tranny? That would be impressive.

I do see why the auto swap, especially with the lockup torque converter is the way to go for reliability... However I cant drive auto, hence can say this... You can get a kormex rebuilt tranny shipped for 750. I say thats a steal when local shops want more and this is a fragile tranny so I wouldnt trust just any dude to fix it. You can also try to change the input bearing. Miller Specialty makes a tool for the job. Worth a shot if you can get your hands on it, as buying it costs 200$ There is also a trick using two screw drivers to change it.