wish I would have found this before I put the trans back in.
1996 Bronco/F-Series Workshop Manual

Would have been helpful then, well unfortunatly I did not find the problem yet, but i am determined, and now i have the workshop manual. will post when i figure it out.

 

Looking for advise on this, seperator plate has some pitting, it looks to be only in the oil gally areas, could this be the cause of the leaking, I have narrowed this down to the valve body, air pressure tests confirm the pistons internally are working properly. Or should the gasket still seal.

 

So It is fixed and working properly now, the problem was in the valve body, not exactly sure what it was but here is what i did. I went and purchased a transgo shift kit, my thinking on this was that it would replace any springs of known issues in the valve body, i installed the shift kit as per directions for tow/haul, I removed all other valves and reinstalled just to make sure they were moving freely, after seeing the seperator plate and its condition I took a good look at the surface of the main valve body, and it did not look like a shiny flat surface, with a straight edge I could not fit feeler guage under it, but the surface was suspect. So i glued some 400 grit wet sandpaper to a thicker sheet of glass that i have, and using the weight of the valve body I sanded the surface, taking it real easy and making sure it stayed flat. as I progressed I could see that the center section took some time before it started to clean up, so there was a difference in height, not that I could measure, but it was there. After i got a nice clean surface, i cleaned the valve body and reinstalled, and it shifts great, second gear is solid and I am very happy. I did reuse the seperator plate as I could not find one locally, So I either had a shift valve sticking or the valve body was leaking and sanding the surface did the trick.

 

Good work!