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Ok so '98 C5 LS1 Auto trans. When I start driving it shifts normally to 3 and 4. This is where it gets interesting. If I slow down or the trans downshifts under 3rd gear then it will no longer shift back up. Instead, it sounds like the car is in neutral. If I shut the car off and start driving again, then it will shift into 3 and 4, but will once again go neutral if it downshifts. If I keep it in drive and it downshifts, then it will rev until I get to like 5k RPMs which at that point will continue to accelerate in second. I hope this makes sense. It almost seems like a computer issue. Any thought on what it could be?
Checked lines for leaks and topped off fluid. There were no codes for it. I would think it is the trans itself, except when I turn it off and back on, it works once. I think it is electrical or computer based, I am not sure.
This does not sound good and sounds like an internal failure to me. There are some sealing rings on the input clutch housing shaft and I have seen where one is torn/cut and will allow the 3 - 4 clutches to slip and burn. Once they have created too much clearance in the clutch pack it will free wheel or feel like neutral. What is the fluid condition like and how many miles on the transmission?
Does it feel like it's in neutral if you hit the gas hard? I mean RPM's go up but car doesn't accelerate. This was my problem and the 3-4 gears were shot. Had to rebuild. Good luck, hope it's not time for a rebuild.