Code 708 Trans Range sensor?

Code 708 Trans Range sensor? 97' 4.6L with 200,000+ miles. When I leave the car in park while running at normal operating temperature the overdrive off light blinks on and off. while driving the vehicle it doesn't want to shift out of 1st to 2nd or 3rd. I can manually shift to 2nd no problem. the symptoms do not occur until I drive around for awhile. Also it seems when I let off the gas pedal a little while in 3rd gear it starts to slip into 1st. once this starts to happen it will not shift properly throughout the entire trip. The Air Conditioner also seems to be affecting this some how. It will make the shift problem occur quicker. I guess my question is by replacing this trans range sensor will it solve my problem? Or does anyone have any other solutions.

Yes, replace the TR sensor. It *could* also be a wiring problem, but the early sensors were known to get moisture inside and cause trouble.

The MLP sensor can, in some cases, cause what you describe. The transmission part of the computer relies on very specific voltage readings to sense gearshift lever position, if these readings are off by as little as 2%, the computer will get erroneous information, and think the driver is manually selecting different gears.
Havig the A/C effect the transmission is a good indication you have some electrical issues to deal with.