1992 Laser Tranny Problem Help!!

I have a 1992 Plymouth Laser 2.0 non-Turbo with an automatic transmission. Around 35 mph the tranny is either slipping or actually going into neutral, not sure which. This only happens if the overdrive switch is enabled. If I lock out overdrive the car drives just fine (albeit without the gas mileage benefit from overdrive).

Any ideas what the problem might be? More likely mechanical tranny problem or a computer problem? Thanks for any ideas or other input.

(Have recently done a tranny service on it so it has a fresh filter and fluid in it, just to rule that out. The problem existed before the service and is the same after.)