I have an 89 f250 with the e4od in it. My issue is that when I’m just driving along cruising the trans will pop into neutral then bump back into gear. It will nonstop do it while driving in town. If I’m on the throttle to speed up or off the throttle to slow down no issues, it acts normally. If I’m on the highway it will go into neutral and stay lost their for a second or two before it jumps back in gear. I changed the trans fluid. While doing that I switched to the pan with a plug, did new filter and pan gasket. Also got my hands on the filter clip just to help so I can eliminate a common problem. I did drain the tc but I didn’t flush the lines. When I was doing it I was looking at my sensors to see if any where really dirty or somehow disconnected. In the wire harness above the MLPS, there is a blue wire that goes into a small white block, then back out of it. What is the little white block and what does it do? It has a chunk missing, could that cause any issues at all? Tach works perfect speedo is dead at 0 when on the throttle, bounces around like crazy while cruising, works perfect when off the throttle. I attached a picture of it and you can see where the chunk is missing on the side opposite the wires

 

I have no idea what that white thing is.

You have the classic symptoms of a failing MLPS. I recommend changing it.