97 LT1 4L60E Vig 3200 stall

When I first installed the TC it would lock like normal. After a few months however I noticed that it stopped locking up and I was getting some strange occurances in OD. When cruising on the freeway in OD if I hit the gas the TC would flash up to about 4500 RPM before it would "catch". Fast forward to today. I was on the freeway with my scanner hooked up b/c I wanted to see what the TC solenoid was doing. The ECM would show the TC as locked up...hit the brake unlock...hit the gas again lock. Only problem is that the TC was not locked and if I hit the gas it would flash to 5000 rpm (75mph in OD). The problem is that after about a mile of testing this 3rd and 4th gear ceased to work. The tranny would shift to 3rd but would never engage. I had to drive home in 2nd The tranny was not overheating in fact it never got over 180. Does it sound like my tranny is toast? Earlier in the day code P0141 (rear 02 sensor) popped up. Any advice would be appreciated.