END RESULT-Turns out the tranny was slowly going bad. It finally threw codes about 5 weeks ago. Took it to an ASE certified mechanic here in town (all my extended warranty requires is the shop have an ASE tech), found out the transmission, solenoid, and torque converter needed to be replaced!! The dealership in Cali just didn't want to admit it was the transmission going bad, probably could have saved themselves some money but hell I don't care!
The ext. warranty paid for itself with this one, newly built Jasper transmission and components. All told: cost me a $100 deductible!
That hard shift has been with me since November, and its finally gone! Jeep drives nice and smooth now.
