That really sucks. I guess that you really need to make sure that the radiator is fine and replace at any sign of problems. Checking fluid levels and color regularly is the best chance that you have to prevent the issue. The alternative is to mount a transmission cooler outside of the radiator rather than integrated.
You are the first person that I have ever heard that had this issue.
Regarding fixing it, I would have tried flushing the fluid. If the transmission is already toast, then you have no choice but to replace it and the radiator. If it were me, I would do the radiator myself and have the vehicle then towed to a transmission shop other than the dealer to have the transmission replaced. That could cut your costs in half. You could also try to source a used or aftermarket rebuild that may save you more cash.
I killed the transmission on my ZJ. A local shop gave me a lifetime warranty for the same price as the dealer, which was way better than what the dealer was offering. The shop had me return once per year for free service to keep the warranty active. I got 140K miles on the new transmission before selling the ZJ to my brother. It is still good 13 years later.
'06 XK Limited, 5.7L, QD II, Black, 124K
'02 WJ Overland, 4.7L HO, QD, Inferno Red, 101K