I havent been able to get a quote yet, apparently this is a common problem on chevelles. Has anyone else had this repaired? Is it something thats repairable in the garage (mine has no welder) or is it something that requires welding to be done properly? Any idea of the cost associated with it?

I repaired one using POR putty. I suggest you remove the rear window to make sure it's just not the seal, you may also find other areas that need attention.
Remove the window, wire wheel, acid etch, then POR putty. Reinstall window.

It depends. But if it is like a lot of our Chevelles then you may need to do some welding. You can use a small 110V welder, and have a piece of sheetmetal bent for you. Just make some measurements and take them into your local HVAC shop and they will do it for little to no money, atleast thats what I did. Once you have done this, start by taking from the middle out and small stitch welds to fill in between waiting for the metal to cool down between welds alternating from side to side of center.

Now if it is just the actual seal you can remove your window trim, and cut the old seal that is still good, clean the channel really well, and install it yourself, or have a professiona do it for you. You can get the seal at any local auto window shop.

There's no way of knowing what needs to be done until the back glass is removed.

The rear bottom corners are the most notorius trouble spot for Chevelles. Any and all water just collects in those spots.

I would:

Remove trim & glass.
Inspect
Fix any rust
Do this mod to never have this problem again: http://www.chevelles.com/forums/showthread.php?t=173949&highlight=rear+window+drains
Wire wheel the entire channel
POR-15 the surface
Have a professional glass dude install glass, clips & trim.

Now this may sound a bit tacky so forgive me but a guy i work with has an older car also and after he had his channel fixed at a body shop he put silicone caulking around it. He rebuilt the car in high school so none of info he had other than that really applies today. Has anyone else ever heard of putting a bead of caulk around it to keep the water out?

what year is it?, wheres it leaking?....when i redid my first chevelle (a '66) i had to get matching channel bent at a shop (as reported above). now they make replacement channel as well as the complete panel from trunk to lower rear window, if its leaking into the car, it's probably a seal problem (best case scenario), if its leaking into the trunk its a rust hole problem (unfortunately, the more common scenario). also as stated above, you really need to remove the glass to get the full picture, but if its a seal leak you maybe can get by temporarily by removing the trim and using a little sealer in the offending area.
in either case, to fix it properly you need to take the glass out anyway, so, in my book, now is the time....good luck

it is definitely leaking into the trunk. I am going by the tech college this week because i was told they are always looking for older/classic cars to work on because the newer ones have so much plastic that the students dont really get to learn how to work sheet metal. Guys from work who have done this say the work is really good quality. They dont let the brand new guys loose on third party vehicles. They dont charge for labor, only for parts and supplies so i am hoping i can get them to fix the window channel and dent in the door. Heck maybe if i am really lucky they will sandblast the underside and get the rust cleaned up so all i have to do is primer and paint it.
The caulking i was talking about, it was used after the repair to seal out water and prevent future repeat problems. Other than this one guy i havent read anyone having done it and wasnt sure how it would work out or last?

when I did mine I took out the window using a piece of welding wire, and me and a bud cut the old seal on the window and carefully lifted it out. we then cleaned it up real good and discovered alot of rust that needed attention. I then sand blasted the area and killed all the rust, repaired the rear deck panel between the window and trunk which I purchased from ground up. SS396.com then I carefully peiced new metal in where the bad was and then give it a light skim coat of filler. replaced all the studs and clips and then put the window back in along with the chrome... first thing you ought to do is get the old window out and see what you have. It might just be a seal. you might be in good shape. it didnt cost much maybe 100.00 if even that, and alot of patience .. good luck.. if you have alot of surface rust when you take these areas out like the deck lid. get something to kill the rust or sand blast it and then paint with a good rust killng agent, get rid of it while you can get to it. it would probally run around 40.00 or 50.00 and hr plus material at your local body shop, unless you have a bud with a welder.. Im now working on the trunk which went bad due to the leaky window problem...

I would not recomend using any silicone or other non approved automotive window sealant. What I found on an old camaro I had in HS was that someone "sealed" the bottom of the front window with silicone. Only problem is that it kept rain from getting in, but it allowed moisture to seap down from the top and under the bottom area and it rotted the entire lower sheetmetal. The only thing holding the window at that point was the silicone attached to the cowl and chrome trim.

I am quickly becomming a HUGE fan of this site! I figured i hadnt read about that little "technique" anywhere else and sure enough y'all have made it obvious why. Hopefully i can get the college body shop to weld it up for me and do it right. If i can get time away from work i may even take some classes there myself.

Now this may sound a bit tacky so forgive me but a guy i work with has an older car also and after he had his channel fixed at a body shop he put silicone caulking around it. He rebuilt the car in high school so none of info he had other than that really applies today. Has anyone else ever heard of putting a bead of caulk around it to keep the water out?

I have seen one car like this. i think it may have been a 66 or 67 GTO. it had a bead of clear silicone on either side of the rear window trim. I am thinking of doing the same when i get mine repaired

sounds like exactly what the guy i worked with did to his. He put everything back together then sealed up the edges around the trim with clear silicone to "weather proof" it. As you can see from the info the guys gave above it may end up causing you more rust than it prevents.
I started thinking about what they said and believe them to be right on the money. The silicone will keep the actual rain out but when the weather changes metal begins to sweat and condensation could and probably would collect under the silicone since it will never truly be airtight. When this happens since the silicone wont let the air flow freely it will more than likely allow the condensation to collect and sit longer than it should and over time it would then cause more rust and rot.
I am just going to buy a trim tool and occasionally remove the trim and insure the area under it is cleaned well and allowed to dry completely. Since i am garaging the car now that i own it i dont think the rain will be as big a factor as it was for the previous owner.