Ok so I have and a 98 with 4 wheel drive. The problem occurred while driving down the high way with no warning. When taking off from a dead stop it shift fine from 1-2 but when shifting into 3rd the truck will free rev and proceed to free wheel until it shifts back down to 2nd. I dropped the transmission and found that the over drive band was black in the center. (I believe that means it was not engaging correctly?) And the fluid had a burnt smell. The rest of the transmission looks fine internally other than the OD band. I then took the valve body apart and checked the check ***** and valves. Seems to be no issues there either. Also the OD servo clip is still intact and the servo itself seems to be working correctly. My question is could a bad shift solenoid or OD solenoid also cause these issues?

 

There is no OD solenoid, so that can't be the problem. A shift solenoid can't cause neutral, it just won't shift, but will stay in the lower gear.

You have a problem in the direct clutch. The overdrive band isn't engaged in third gear, so it cannot cause this, either.

 

Ok thankyou

 

Ok so I pulled the direct drum apart to find that it was wasted. Not sure what could cause this issue?

 

Years and miles. Transmissions don't last forever.

 

It was recently rebuilt it maybe made 30 miles

 

Whoever rebuilt it screwed up.