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Talked to a friend who spent some time as a transmission tech and he thinks it might just be a sticky valvebody. Recommend changing the fluid and filter along with some additive to help clean it out. I don't believe in the "rebuild in a can" but sometimes additives or cleaners can fix problems.
Fluid was dirty but still was fairly red. Bottom of the pan had a thin layer of the blackish clutch material but what I would expect. Didn't get to test drive because it was getting late but just cycling between D and R it felt like it was engaging in reverse and would move backwards when you took your foot off the brake.
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