First i want to say how sorry I am that this is your very first introduction to the Diesel World. Trust me, when I say that when they are running right, there is nothing better then a diesel. You have been taken, and I would assume you are not the first or last that E-bay will hear from. The guy that sold the truck was a pro, he very carefully worded the description to meet the E-bay requirements, while at the same time avoiding the truth. For instance, when you thought he talked about the transfer case and front axle, he simply stated the 4X4 system was good, which according to E-bay police, isn't covered. very slick.
Let this be a warning for all that shop and buy on E-bay. While E-bay may be a good place to get items cheaper they thru retail establishments, it is also a great place to get scammed by cheating con artist.
The next thing about this purchase is the trucks past use..... it was a snow plow. There is nothing worse,(and nothing one should avoid more) then a snow plow truck. They only operate in the worst of conditions, when most people are safe at home. They see huge amounts of salt, both from the highway and from the back of the truck... . no-one should buy a snow plow truck and expect it to not be fully rusted out. It can not help but to be rusted, it lives in salt.
If you have ever plowed, you know the life the truck lived. Constantly going back and forth, moving from forward to reverse..... constantly... and never waiting for the truck to stop before shifting gears... which is a huge killer for an automatic. This same movement also kills the transfer case, which has probally seen way to much action. Check the oil in it and see what you have. This types of trucks are usually not what you would want to invest your hard earned money in. They see a life time of abuse and neglect, and are only sold once they are truly worn out.
I do feel sorry for you, while you may sort out the trasnmission problem and the transfer case problem, those two parts are very expensive to replace and install. I can't help thinking that this truck will be a constant reminder of why you should not have bought it, for once one item is fixed you will mostlikely have another turn up. If it was me, Id work on the obvious replacement of bad parts, spend some time getting the sander running, clean as much rust off and hit those areas with some undercoating, and sell the thing, hoping you get enought to break even. Good luck.