after reading everyone's reply I say Just pull the tranny and see what they screwed up. it's not hard to do if your mechanically inclined.

 

Try shifting with the engine off. If it goes thru all gears fine but won't go into gear when you start the engine, typically 1st and 2nd (without anything grinding), the tranny fluid is low or too slippery. I think the correct fluid is SAE 75W-90, API Grade GL-3 gear oil, except for the T5, which uses Dexron automatic tranny fluid. If it's just been serviced, you can add friction modifiers, but better yet, drain & re-fill.

 

When i get some time off work I'm going to replace the slave cylinder and change the fluid and see if that helps. Hopefully it will warm up soon so i can pull the trans and t-case out because the trans output seal is definitely leaking.

 

So i finally got around to messing with the jeep today. I replaced the seals in the trans and transfer case because they were leaking everywhere. I also realized that my shifter was basically unbolted from the trans. There are 4 bolts holding the shifter onto the trans, 2 of which were missing and the other 2 were almost falling out. I replaced both of those and used silicone on the gaskets. I no longer have a leak and the shifts are tight and where they are suppose to be. No more not going into second. Thanks for everyones input. It was a great help.