Thanks for chiming in with ideas. I already ruled out the whole vac modualator setup (the thing on the back of the IP that runs down to the tranny via vac line) by disconnecting it and finding that I still had flares.

Unfortunately the problem does not seem to be surface simple...I've narrowed it down to something internal in the tranny...and its not clutch packs or bands...becuase each and every gear shift (1-2,2-3,3-4) is flaring and previous to this random occurance, I had no flaring.

I could bust into 20 paragraphs about transmission theory/operation that i learned last night at 2am reading the manual for this thing but I am sure none of you want to hear it