I had this problem on a 87 chevy s10 Blazer. I checked postings on the 7004r trans and found there is what is called "limp mode." If there is an unexplained increase in rpm (i.e. slipping), the safety features in the trans will by default go into the next lower gear so you can "limp" to a garage etc.
For a fix, I changed the trans fluid 3 times and used valvoline dexron vi for the last change. OD was still slipping so I adjusted the TV cable and made sure the fluid was topped off (engine in idle and warmed). I adjusted the TV cable by pushing the release button and pulling the cable housing to the rear and then pulling the cable to WOT. A thighter TV cable will increases the trans fluid pressure and makes for tighter shifting.
The TV cable adjustment I made also changed the shift points to hold low gear longer and down shifts faster. Overall, the shifting with dexron vi is smoother and more responsive and may have cleaned out some of the varnish deposites...however,
your milage may vary.......