I was told about this mechanic in Leppington who specialises in SMT's and MR2's in general.
He's dealt with this problem many times before, and knew exactly what i was going through with my MR2 before i could finish off my explanation. I also wasted $60 asking a toyota specialist online who told me the same thing AFTER i had already found this out by helpful people on this forum and that specialist mechanic.
The online specialist said that once i change the ECU, if its not fixed- to change the TCU, then finally the transmission assembly itself. This is what he wrote:
"Those particular MR2's had a slew of problems, especially the sequential transmission models. Before getting yourself too deep into this, I want you to weigh your options carefully. Because this repair could potentially cost you up to $7000.
Those had problems very regularly with computers. An updated ECU was released from Toyota to correct the computer problems. You also could have a problem with the transmission computer. These are also common for failure. And finally, you could have to replace the transmission assembly. There is a very real possibility that the only real fix for you would be to replace all 3 components, which can be extremely costly, very quickly. Unfortunately, due to the intermitancy of the issues, and the way Toyota has the system designed, you never really know exactly what the problem is until you replace one of the parts and see if it is fixed. Just be prepared, that after you replace the ECU, it may be fixed for a week, a month, or 6 months, and then it starts acting up again with one of the other 2 components I mentioned in a failed state. I have seen this happen many times.
If I had to take a stab in the dark, I would start by replacing the computer with a new one and see where it leaves you. Unfortunately, the only way to know is to replace it and see what happens"
Hope that helps someone else :)