Water in 4L60E automatic transmission do i need to rebuild transmission

I recently got a 1994 SS s10 with the 4L60E automatic transmission. But its got water in the transmission oil. I ve heard your supposed rebuild the whole transmission or your suppose to flush it. I don't know what is the best for the truck. The truck was my grandpa's truck and it only has 73,391 miles on it. I don't know if i should put a rebuild kit in it or just flush it. need help!

You can flush it and see how it goes, but rest assured, it will fail at some point sooner than later and need a rebuild.

How did water get in there? Did it get poured in the filler tube, or was the transm cooler leaking coolant?

If the trans has been run with water in it, the fluid should look milky and frothy, like a strawberry milkshake. So long as it has not sat for years with water in it, it should not pose a problem.

Drop the pan and filter and let all the trans fluid drain out. Reinstall the pan and fill with fluid. Before starting the engine, disconnect the upper transmission cooler line at the transmission. Start the engine. Milky fluid should flow out of the disconnected line. When the stuff coming out is no longer milky, stop the engine and reconnect the line. You may have to top-up the trans fluid level when doing this.

Then run the engine for a few more minutes and drop the pan again. Let the fluid drain, change the filter, reinstall the pan and add fresh fluid. Disconnect the cooler line again and flush it, then you are good to go.

I have flooded two transmissions (one by completely submerging my Jeep in a river). Both times, this method has worked just fine. Unlike an engine, transmissions are somewhat more tolerant of water contamination

Usually a tell tale sign of tranny damage as a result of water, either coolant or actual water getting in somehow, is a rusty dipstick. (A good thing to keep in mind when looking at buying a used vehicle, is to check the dipstick). The trouble with water of any kind in there, is that water, compared to tranny oil, has a low boiling point. It evaporates when the tranny gets hot and starts attacking the glue that holds the clutch material on the steel plates. Over time, the glue breakes down, clutches start slipping and your left with a tranny that needs a rebuild.