With all the slipping the tranny has been doing, I would say it's burnt up and time for an overhaul now. Did you say you set TV pressure 40 psi at idle then installed the block gauge and it went back to 39 psi? If so there's some internal valve body problems and it's likely to late for any adjustments.
Ken Collins, BadShoe Productions, How To DVD's specializing in Ford drivetrains www.badshoeproductions.com (banner ad below)
email; badshoe@myway.com
