Automatic Transmission Control Module problems of the 2003 Volvo S40

My 2003 S40 has been slipping gear between 3rd and 4th gear and ocassional hard shift between 2nd and 3rd gear. The car only has 49000 miles. I have gone to the dealer and they said, there is no software update for the tcm (transmission control module)and it needs to be replaced. Cost $800. This gear slip makes driving very bothersome and dangerous on occasion. If you need to speed up to get out of the way, the slip causes the car to lose power. Few seconds makes a difference between life and death. I have taken the car to another import repair shop and had them replace the tcm. Which did not help the issue. Then I took the car back to the dealer and asked to do another diagnostic to see if the tcm is the issue or not. They said, the tcm could not be functioning properly. They want me to replace the tcm through them and see if it will resolve the problem, otherwise it will be a transmission issue. I have researched on the web and through multiple forums, there have hundreds of issues related to tcm and transmission on these models. I do not understand how can a car have tcm or transmission issue with all it's factory recommended service done as scheduled.