torque converter leaking down ATF fluid

My 1976 300D (3-speed 722.1 trans)is apparently leaking fluid back from the torque converter - after the car sits overnight the fluid level is 2 inches or more above the max mark.

Checking the fluid level cold (car running) shows the level way below the add mark.

Checked hot (after 25+ miles) the fluid is between the add and max marks.

Am I correct to assume that the seals and/or valves are leaking fluid back from the torque converter. Is there anything else that might explain this leak back?

Short of a rebuild, what are my options? If there isn't anything I can do short of a rebuild, what symptoms should I look for as the trans begins to get worse?

Robert