I hate to be the bearer of bad tidings, but this looks to me like the transmission case is completely cracked through. In *my* opinion, the only way to fix this is to take a die grinder and rotary burr, grind most of the area out, and TIG weld it. The problem is this: The welder will more than likely want to put the case in an oven to preheat it. That, of course, means a complete tear down. The secondary problem is... warpage. Once repaired, will the bearing bores, etc. still be in alignment? That is a definite *maybe.. Maybe not.*
I think you are looking at a new case. Of course you should get a second opinion..