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My experience with automatics say that OD is for use with light loads where the engine has the power to pull the load without using alot of available power. D is basically 3rd gear in an automatic. In third the rpm is higher at the same speed as when in OD, so when the gear selector (shifter) is in D the rpm is closer to the power band, which in a 302 is around 2800-3700. Thats when the most available power at that particular speed is best. so when you approach a hill your already in the proper gear to maintain speed. In OD you approach the hill and have to slow down and the accelerator almost to half throttle, loosing speed at the same time before it shifts from OD (fourth) to D (third)... So in short form, the transmission does no shifting, creating less heat, the engine doesnt get lugged down, saving fuel, and the driveline is not exposed to fluctuating torque, its more constant in D. Hope that works for ya.
My 1992 ford F-150 302 5 speed 4.10 trac-lok has the trailering and handling packages, BUT SOMEHOW IT HAS PLASTIC MIRRORS!!!! @#$%! But anyway I pull a 8 bale gooseneck trailer (with overloads) and she pulls it in overdrive.
I have towed in OD with my 351/E40D/3.55/29" tires, at 1000' elevation with about 5000#. I don't tow in cruise, and I push the OD off button at the bottom of a hill instead of letting it load up hard then take OD off. My father (retired Ford automatic trans guru) told me the E4OD in my 96' will handle that fine. I have the SuperCool package (engine oil cooler, double thick radiator, factory aux. trans cooler). He said if it hunts for gears take OD off and slow down. I was doing that in 2004, 80,000 miles on the truck. Now with 203000 my tranny still feels good, and all I do is change fluid & filter every 60k. The pre 95' E4ODs lack some of the updates, so perhaps you need to treat them more nicely. At altitude (WY & CO) I can't go up a hill/pass empty with OD on, much less with a trailer (even down to 2000# trailer!).
Just be nice to it leaving a stop, don't let it hunt, and keep it cool. I think I'd run air bags if I was towing 5000#+ on a regular basis again.
EDIT: I've towed that same #5000 trailer with a 95' 302/4R70W/3.31?/31" tire at 1000' elevation and it was working harder, a headwind=no OD, but it did get the job done many times.
Also, the quad shock package has nothing to do with the max tow package, but the sway bars do.
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