It's the solenoid
Pretty sure you can get to it by dropping the pan. It's really messy though if the pan doesn't have a drain plug. Lots of wires just running around exposed in there too. Could be were the damage is. This website has a lot of info and pictures you may find useful:
What happens if you just leave it unplugged?
TRhanks Leon , I shoulda researched before i asked ... it's not that big of a deal because i also want to change the filter and do an oil change on this trans . And who knows , there might be a bare wire in there causing all the problems . But I'm going to order a new solenoid anyway . I figger as long as I'm under there I might as well go ahead and change the speedo drive to the mechanical and set it up for the new 3.42 gearset I have sittin' here . And since I noticed a little bit of oil spray on the underside of the truck , the tail shaft housing will get a new bushing and seal . No sense at all in doing it halfway then doing it over .
I'll lose probably about 10% on gas mileage and I think that plug also powers the backup lights . I could care less about the lights , but this thing gets lousy enough mileage when it all works right .
When I was fooling with my own years ago... it wasn't plugged in from the factory and didn't work for the first 3000 miles or so. I figured it out when I got the service manual and looked up what that loose cable connection was for :)
The mechanics I talked with thought it might run hotter unplugged. More heat generated with the torque converter slipping when the clutch isn't engaged. That tranny was quite a new design then, a lot more is known about them nowadays...
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