mackernanr did you try online places? If you google hydro-gear you should get a few. Not sure if they will be cheaper but worth a try. I cant believe $800! for a transaxle! How much did the tractor cost initially? I did peruse ebay before buying from Sears. Had they not offered a percent off and free installation/labor, I would have gone ebay. There is a seller named sel_lo out of Georgia that sells a lot of Sears transaxles. I cant vouch for him but his feedback looks pretty good and his prices are good. Here is a link of one of his auctions:
http://cgi.ebay.com/CRAFTSMAN-42-RIDING-LAWN-MOWER-HYDRO-TRANSAXLE-171613_W0QQitemZ230002173739QQihZ013QQcategoryZ82238QQssPageNameZWDVWQQrdZ1QQcmdZViewItem
Just make sure it is the right part number before agreeing to buy. Ithink he gives the hydro-gear part number in the description. If you cant find an exact match you might try hitting the button 'ask seller a question' and see what he has.