transmission fluid smells burnt

[farmmedicoh]

the saga continues
took my 85 300SD on it's first long drive yesterday
got about 70 miles into it and noticed that the tranny started losing power at highway speed when i was going up hills
nothing terrible
should mention that it still shifts very gently
(thot they were supposed to be a bit stiffer)
after about 90 miles i pulled over b/c i was looking at an 800 mile one way trip and wasn't liking my options of getting stranded in the middle of nowhere
fluid level seems just a tiny but high but there was no foam in it
it does smell burned tho
it shouldn't
it's new fluid
i didn't change my filter when i took the tranny out of the 82 but did drain the torque converter
going to drop the tranny oil pan and change the filter and clean out the pan this time
what causes the burned smell?
is it as bad a sign as i think it is?
thx