It indeed sounds as if the transmission is going "South"... This could be either a front pump problem,or torque converter issue.Of course there are any number of issues that could be causing the problem. The only reason I said Torque converter,is that OD(or 4th gear) is basically a Torque converter lockout that makes the drive system directly coupled(while in Overdrive).If you have the tranny rebuilt,the torque converter should be replaced as well.
If you have the tools,and "savy" one of our sponsors(rockauto) has a rebuild kit for the transmission....you could concievably get a manual on the tranny,study it,and rebuild it yourself....otherwise it will indeed run around 2 grand to have it professionally done.