[jeffcoslacker]

There should be a large steel line coming off the driver's side of the intake manifold, that goes down to the front side of the tranny, probably under the air filter box. There it plugs onto a round canister that has a diapragm in it that modulates upshifts by manifold vacuum. If the rubber hose at either end of the line is split or swelled so it sucks air, or the diaphragm is blown, they will drop out of gear on upshifts...I'd start there. If the line and hose looks good, pull the hose off down at the modulator end...if there's any fluid drips or the inside of the hose is oily, the modulator is blown and needs replaced.

If that all looks good, there could be a solenoid malfunction or a stuck valve body, worn out clutchpack (not likely) or something worse...

Does it feel like it starts to shift and just fails to engage third, or does it just wind up high in second then fall out of engagement?