1996 Ford F-350 transmission problem

I have a 1996 Ford F-350, 4x4, Powerstroke, 4 speed automatic transmission , 26,000 miles. It sits most of the time and never worked hard in its life. I am getting it ready for winter to plow my driveway and went to move it the other day and the overdrive "OFF" light came on ( on its own) when I started it. It never came on before. I took it for a ride to see what is going on and the trans would only shift up to 3rd gear. After pushing the on/off button many times it shifted to 4th gear but on its own shifted back to 3rd then to 4th. After driving it a while the trans shifted properly to 4th then down to 3rd when I pushed the button. Next morning, same problem. I have maybe 3,000 miles on the transmission oil/filter change that was done by a now out of business Ford dealer. I also just changed the air and fuel filters so maybe I distribed a sensor or wire. To me it seems like an electrical problem. Any ideas? Thanks!!
 
The OD light flashing means there is a transmission problem and it will go into a "limp mode" in which it will shift pretty hard to help protect the torque converter. Now if the light is just staying on, it means overdrive is locked out, and is probably just a bad switch causing it to stay off.
 
I have a '99. These things have a habit of the wiring to the OD on/off button and the indicator light breaking in the steering column near the base of the shift lever. I've had mine apart to fix a break in the wiring. It's poorly routed from the factory and flexes into a kink. Added some shrink tubing to reinforce it and tried to route it to avoid future kinks. It's not too hard to get the cover off the steering column.

Keith
 
The throttle position sensor is known of causing that problem - but you have to read the trouble codes to be sure. The sensor is on slotted mounts and easy to adjust using an ohm-meter. When it gets out of adjustment, the trans will keep going into defaul hi-pressure mode and shift like a rock.
 
Thanks for the help!! The light stays on (not flashing)and the transmission shifts smoothly 1,2,3 but not into 4th. Then a while later, it shifts into 4 then to 3 then to 4 then to 3 then works like normal. Are those sensors on the outside of the transmission?
 
They are all outside of the transmission. The speed sensor is on top of the rear diff (if its being flakey the speedometer will bounce, cruise control will shut off on its own, and in extreme conditions the od light may flash). The neutral safety switch is mounted on the side of the transmission, on the drivers side, you will see a connector pluged into it. The TPS (throttle position switch) is mounted on the accelerator pedal, if its flaking out you will get engine surging and the check engine light will probably come on. I'm thinking its really something in the OD off switch. I have heard before that the wire is prone for breaking and causing your problem.
 

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