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I had the overdrive light flashing when I had an alternator problem. Ford then charged me about $270 to replace a $25 sensor on the differential and run the diagnostic codes so they could find out that nothing else was wrong. I'm pretty sure the sensor code was caused by extremely low voltage while the engine was running and that it would have cleared itself after I fixed the alternator. So - not to say that you have an alternator problem, but to say that you should figure out what code is in the computer and see if it is something easily fixed before you go let the gorillas tear up your Ford and have a large expense to show for it.
I have a 97 T-bird with a similar problem. The OD light flashes from first shifting to reverse till I drive a few miles (1 to 3). I pulled in to a Ford dealer to pick up some parts and decided to get some free advice. Without looking at the car the trans tech says I need a new trans to the tune of about $3500. His recommendation was to drive it till it starts slipping then bring it in.
I'm wondering if it is a voltage issue. My battery is showing corrosion on the posts which has always preceeded needing a new battery in my experience. I'm going to try cleaning the posts on the battery and check the running system voltages and hope it isn't needing a new tranny.