radbad, Thank you for your post! I have solved this problem, and have been planning a write up to post here, but have not yet been able to make the time to do it yet. some of your finding are indeed correct--and your idea that my problem was due to overfill was exactly correct! My truck shifts awesome now, wayyyyyy better than it did on the motor oil. The Dex-III is ok in these xmsns; Dex III is basically motor oil with some additives--mostly anti-foaming and anti corrosion. I can find the references for this and post them later. I'll have to look this up again too, but I believe it is the synthetics that are not good for the seals on these xmsns...
Regarding your comets about the fluid capacity, I had the exact same trouble, but figured it out... Was befuddled that I was only able to get less than 5 gal out of it, when the manual said I should get ~8 gal at fluid change. Again, I plan to post a write up of my findings, but there are two important things you have do to when you dump the fluid: The xmsn has to be hot--not just the engine hot, you have to drive it a few miles right before you dump. Second--you have to dump, replace the plugs in the xfr-case and the xmsn, let it set a while, open them both again, plug em and let them set, then open them both again.... Each time I let mine set, I went on to other things, and it ended up setting ~48-72 hours. Each time I opened I got about a gallon out of the xmsn, and about a quart out of the xfr-case. I was able to get over 7 gal out this way.