DETAILS: TH400 behind a mild 454, bought this transmission as a rebuilt core with a "shift kit" and no other mods. Running a stock torque converter and a B&M ratchet shifter which I like to manually shift due to it shifting too early (no kick down switch either). Vac modulator is connected, no leaks.

PROBLEM: Noticed recently that it seems to slip real bad when I ratchet into second gear under throttle. Also, when cruising in 2nd and you let off the gas, the engine drops back to idle. The motor does not "drag" like is does in 1st and 3rd (the way a standard trans does when you let off in gear).

QUESTION: What is about to fail? Do I need to rebuild this thing? Are my driving habits causing this problem?

Thanks,
-Kevin