before i swapped to the zf5 my truck would shift hard whenever it rained. turned out the sealing gasket in the connector on the RH side of the tranny was bad and letting water in. you might check and make sure you connector there is seated right. it looked like it was quite easy to get that seal all jammed up inside so that the pins didnt engage right.
The OD light isn't flashing or anything and the guy told me he built it back to stock and ill have to check but my old transmission never shifted firm even when i could only go 30 mph i put transmission additive in it then it shifted nice for a little bit but then it came back and the transmission oil seems fine