1997 Ford Escort LX Transmission Problem

OKay boys.....HELP!

My Escort is an automatic transmission, 2.0 Ltr L4 FI SOHC. My transmission/transaxle is a 4EAT-F (commonly known as a "baby cat" by transmission specialist). Vehicle has over 123,000 original miles on it:

If you are familiar with these cars, you know that on the gear shift you have the option of D w/overdrive or just Drive.
About a month ago I got into my car, put it in D w/overdrive and pressed the gas pedal. The engine reved up, but I did not move much. Hmmmm....I thought. Car appeared to be starting off in 3rd gear. It repeated this action at every light and every stop sign. Brought the vehicle back to my husband and he serviced the transmission (changed the filter, drained the fluid, cleaned out the pan and cleared away metal filings from dual magnets and installed a new gasket in 19bolt pan and refilled with new fluid and added Lucas transmission slip additive). This worked for about 2 weeks and then it started again. This time I was on the highway when I notice my car would not slip into overdrive - it started in 3rd gear and never changed while car in D w/overdrive. Now if I change from Drive w/overdrive to just Drive, then I get 1st, 2nd then 3rd with no problem. In low gear, there is no problem. Only Drive w/overdrive ever has this problem and only intermitently. I noticed that once the car cools and as long as no stops are made and no changing of gear (reverse or park) occurrs during my trips from one point to another, there seem to be no problems - transmission slipps into every gear easily. Here is an example of what happened on the way to work this morning. Started off this morning in Drive w/overdrive (7:30am) - no problem. Stopped down the street at the store. Came back out, started car, put it in D w/overdrive and it started off in 3rd gear (no 1st, no 2nd). I put the car in Drive and tried to manually shift to overdrive at 50mph -nothing - no overdrive at all! Took it slow to work never going over 50mph. At 6:00pm this evening, when I got off work and returned to my car, started it, put it in D w/overdrive and no problems at all. Drove home and hit every gear, every time! What the HECK?

Now I have no engine light on, no codes found, and a transmission specialist told my Father there is nothing wrong with the transmission on Monday 7/9/07, when my Dad took it to them and couldn't get the car to to act up but did describe the problem as he experienced it as well. Additionally, my husband did replace the radiator on last weekend, but this problem as been going on over a month and is continuing. The car has never overheated or had an engine light come on for any reason. A/c is broken and is never ran (Code for ac was found P1461 = ac pressure sensor-low imput). This is the only code ever found or stored in my ECM.

Can anyone suggest anything that could be causing this problem because it appears to be electrical. HELP ME PLEASE!

I hope someone who knows more will answer better.
Obviously the tranny does have a problem, it just doesnt show up all the time. If you want to experience how the tranny works without any electrical input, there is a connector at the front of the transmission, down fairly low. If you unplug that - you will have disconnected all of the shifting solenoids inside the tranny. There are 4 of them, one for the torque converter lockup, the others for the 1-2 shift, the 2-3 shift, and the 3-4 shift. I dont know if it will work at all with the connector removed - but at least you could try it.
Two possibilities occur to me. 1. The shifting shaft on the top of the tranny is not being allowed to move completely into one of the positions indicated by the shift lever on the console. In other words, with the shift lever showing it was in drive, it might be halfway between Drive and Low, or Drive and "O"drive. This could be resolved by ensuring that shaft is free to rotate, and is not being held at some intermediate position. Also check that the 'kickdown cable' is properly adjusted. This cable runs from the round plastic disc at the throttle body, down to the front of the tranmission. 2 A tiny bit of one of the valve body gaskets has come loose and is partly blocking one of the fluid passages inside the valve body. Fixing this would only happen by removing the valve body. If this is what is wrong, it may mean removing the tranny to get it rebuilt, or installing a rebuilt.
When the 4EAT in my 92 Escort would not pull the car along a level street, I rebuilt it -sort of-. (I didnt open up all of the accumulator pistons). In spite of the tranny having 192,000 miles on it, I never did find anything that looked obviously worn out, and all of the O-ring seals were in good shape.
The tranny worked when I put it back into the car BUT.......would stay in 1st to a fairly high r.p.m., then shift into 3rd, then into 4th in the normal way. It did this for a few hundred miles, then suddenly agreed to shift normally - i.e. 1,2,3,4, then T.Q. lockup in 4th. I still dont know why it skipped 2nd gear for the first week of driving, then began working properly.
The master tranny parts kit cost about $350, and I bought the 2-4 band for $30, and a rebuilt torque converter for $100. It took me about 2 weeks and 4 rolls of paper towels to rebuild it.

Thank you so much for your reply... I printed your reply and gave it directly to my husband once I read it to him. He now has somewhere to start. Thanks again, really!