Now they have said that they changed the Solenoid and tranny fluid anddrove the car and the light came back on so now it's "an internal transmission problem" and they say it needs to be changed again - IE another 1,000.00 in labor!
could it be a faulty control module or something else causing this? Seems to me the error is from the Solenoid "E" not the entire transmission.

 

I can't tell from here and without testing. I don't think the transmission turns the light on for anything else but the solenoids. If you can get a code that will lead you to which solenoid. From what you've said I think it's time to cut this shop loose and find another that can fix this thing and tell you what was wrong. With that you may have a possible case for small claims. If it's not the solenoids then you'll need it pressure tested to find anything else wrong with it.Try to find a small transmission shop, not the national chains, that you have researched as best you can ashonest.