Your trans sounds a lot like mine.

If your 2/3 valves are working well and shunting high vac at closed throttle, you can up the line pressure and adjust the vac valce to firm up shifts withouth haveing neck snaping downshifts(important for not driving one crazy). Otherwise, it's just worn out, probibly the seals dried up in the clutch drum, not holding fluid pressure. Your description sounds almost exactly like mine, and it's been just this way for 50K miles or so. It'll last, adjust your settings and driving style, and start looking for a replacement.

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One more Radar Lover gone...
1982 VW Caddy diesel 406K 1.9L AAZ
1994 E320 195K