98 Contour automatic transmission problems

I have a '98 4-cylinder/2.0 Contour that I bought from a private owner about a month ago. It has 150,000 miles on it. I do a LOT of stop-and-go driving and lately I've noticed that when it shifts from 1st to 2nd gear, sometimes it shifts really hard.
I checked the transmission fluid and it was up to full, so I didn't think much of it. The problem persisted, though, so I took it to a Valvoline quick oil change and had them check it out while they were doing their standard checks. The mechanic said the fluid was really dirty and looked burnt. I had them drain it and put new fluid in. That was yesterday and today I still have this problem.
Now, though, the car seems to shift down real hard too (from 2nd to 1st gear.) Also, at around 50-55 mph, it feels like the transmission may be slipping a bit, so that it doesn't hold a constant speed; there's just a quick succession of accelerate/decelerate/accelerate, etc.
The check engine light is on but I don't have a code reader, so I don't have any diagnostics to go on.
This is quickly getting worse. I'm going to take it to a mechanic of course, but are there any immediate things I should look at / research as to the cause of the problem?

Thank you!

sounds like your forward cluch is going, take it to the shop

My car is doing the same thing. I had it diagnosed yesterday with a transmission specialist. I was told that the O2 sensor codes and possibly others pertaining to the engine came up. Somehow the engine is not supplying the transmission with enough fuel. Good Luck!

ummm the tranny doesnt use fuel

Took it to a dealer, they pulled the code but basically told me nothing for $75. . .
Throwing P1381- Overactive variable cam timing (VCT). Apparently in 1998 (my car's birthdate!) Ford started using this VCT to control emissions and improve fuel economy, but sometimes it throws this code when there's just contaminated oil and no mechanical problems.
Here's an article on it:
http://articles.findarticles.com/p/articles/mi_m0BQA/is_6_81/ai_88248647
The mechanic said that it could be a failing transmission is causing the car to throw this code, but there weren't any other codes either, so "without tearing the transmission apart, we couldn't see what is causing the problem." I guess my transmission has no "pan", preventing them from taking a look inside, so this is all they have to go on.
I know the transmission fluid was burnt when I had it changed, but I'm not sure if there was any debris (metal pieces perhaps?) when they changed it. If there wasn't, could this be a bad VCT solenoid? That would be much easier to fix than a clutch or seal in the transmission.
Robin- not sure about the not-getting-enough-power-thing, maybe I should get that checked out.
Thanks!

Our 98 Contour was experiencing similar symptoms this spring with 75,000 miles. There was also a flashing transmission trouble light indicated as well. Needed a new transmission at the tune of $3,000. I hope yours was something easier.

Took it to a dealer, they pulled the code but basically told me nothing for $75. . .
Throwing P1381- Overactive variable cam timing (VCT). Apparently in 1998 (my car's birthdate!) Ford started using this VCT to control emissions and improve fuel economy, but sometimes it throws this code when there's just contaminated oil and no mechanical problems.
Here's an article on it:
http://articles.findarticles.com/p/articles/mi_m0BQA/is_6_81/ai_88248647
The mechanic said that it could be a failing transmission is causing the car to throw this code, but there weren't any other codes either, so "without tearing the transmission apart, we couldn't see what is causing the problem." I guess my transmission has no "pan", preventing them from taking a look inside, so this is all they have to go on.
I know the transmission fluid was burnt when I had it changed, but I'm not sure if there was any debris (metal pieces perhaps?) when they changed it. If there wasn't, could this be a bad VCT solenoid? That would be much easier to fix than a clutch or seal in the transmission.
Robin- not sure about the not-getting-enough-power-thing, maybe I should get that checked out.
Thanks!

Put some engine flush in it, run it for 10-20 mins, change the oil, refill with 5w30. Sludging and incorrect oil viscosity may cause the VCT to not respond correctly. This doesn't rule out trans. problems, but if the engine isn't running right, the trans. won't shift right either.

well I have a 99 contour and it is do for oil change 3 months ago but im gunna have it done within 3 or 4 days. I have the 2.0 auto with vct.
i already new my prob before I got it checked. when I did my inspection witch was free!!!!! it was the tcc cylinoid. Its a pin that drops down to fist gear when you come to a stop.
This causing high reving and hardshifting. and start in 2end or 3rd.
until it is fixed it is recomended that you drop the shifter all the way down to 1 and build your way up to drive from a stop sign.

I hope this helps present and future zetech family

Yeah...I have the same problem ive redone the transmission fluid ive gotten it checked out all a waste of money i just press the overdrive button and turn it off get up to third gear and pop it back on and i have no problems 2 months i just turn overdrive off and pop it back on when im ready to cruise...i recently tested it without overdrive on again and it was kicking again so hey it may be a nusicance but its not a big deal for me

Hi, There is a ford TSB on this symptom and it pertains to a fractured gasket in the transmission oil pump which causes the hard shift and other shift problems. I am suprised that the FORD? tech didnot address this situation when he checked it out..Have ford look up the TSB's and it will tell you what has to be done...GOOD LUCK....Clay..

I have some bad news,most transmission shops will not touch this transmission and Ford is "picky" on this transmission.The transmission is a POS and most auto salvage yards sell lot of them,they are hard to find.The ground wires have to be in the right spot,the drums inside will melt if the ground wires are not in the right spot and the drums are plastic.I have been inside one so far,scraped one out with a busted case out of a wrecked Contour.