when does this happen, when first fired up? when cold or all the time?

 

I was getting some clunks sometimes when the gears shifted for a few months. I
t wasnt till today when I first started it, that it actually slipped. I thought at first the engine was going into limp mode because I was accelerating and then it simply dropped down a gear. I immediately turned it around and brought it home.
I thought maybe the cold could have had something to do with it, but I'm not sure.

 

sounds like the TCM is doing its job and allowing the transmission to slip a bit when cold to allow it to heat up faster. when the temps drop the computer will hold gears longer before it shifts and allow the convertor to flash a little higher to assist with heating the fluid which will bring the temp to temperature and increase mpg's. Once the car/engine and transmission is fully warm I am guessing everything feels normal, correct?
Per the service manual and owners manual the transmission will act a little more loose when cold to assist with warm ups

You have no idea what a 3200 stall convertor feels like at -20f....

take the car back out and allow it to get competley warmed up and warmed up and we should be able to give you a better diagnosies

 

Great! Thanks for the info. I'll do that tonight.

 

The NAG1 just like a 727 or 904 torqueflite is pretty much bullet proof!!

 

Well for an update, got it checked out at AAMCO (i know you guys really dont like them, but the local one had decent reviews). Said he had an error code pop up for gear slippage from 1st to 2nd. I hadnt noticed a new code pop up because I had an O2 sensor go bad last week and just got a replacement in the mail yesterday. The fluid was burnt as well.

Quoted me $3180 for a full rebuild. Thought it sounded high till I called the dealer, who quoted $3500.