No sir - I think you are communicating what you've discovered just fine. And I believe you might have 2 separate problems here.
1. More thinking on torque converters, if a lighter-duty TC had a different stall speed (or lock-up point, or whatever they call it), that could account for the slushy response you're getting. When you step on the gas, if it's constantly trying to slip rather than lock-up, you'll just be losing power to the slippage. As far as stall speeds and whatnot, I have no idea what to use for the transmission's 'butter zone,'
2. As for the shift points, though - that sounds more like it would be a TV cable adjustment to me (I know Lokar's instructions say to hook their cable up according to their specifics, but then it will most likely require some fine tuning to get the shift points just right). Especially, since it seems to shift early through the entire range. It probably all seems compounded with the 3.00:1 rear gears (especially when OD kicks in). I don't believe you're very far off from being perfectly set-up, though.
There's a lot of information about how the TCs work in Mercury Marauders here.
http://www.mercurymarauder.net/forums/showthread.php?t=39220
But I just read something about there being different AOD TCs for different applications. Factory AOD TCs were:
- 1300-1900 (stall speed) for low-performance/better economy/towing applications (Ford F-150, Econoline E-150, et al)
- 1600-2200 for mid-performance applications (stock 5.0L H.O.)
- AOD-E TC for 5.0L Mustangs had 2400 stall speed
A good article for overall information about the AOD for use in early-model Cougars and Mustangs:
http://www.hemmings.com/mus/stories/2006/05/01/hmn_feature5.html
Something of note I found interesting in this article (assuming you have a standard TV cable... I'm not sure if it would apply to a Lokar cable or not:
"The throttle valve linkage or cable adjustment is very important to allow the AOD to shift properly. Start with a good bushing on your throttle linkage and check this bushing often after installation. Many complaints of improper shifting can be traced to this bushing. New bushings are less than $3 and can be obtained from your dealer or you can purchase aftermarket aluminum replacement bushings, which will last much longer.
To correctly adjust the TV cable assembly, release the locking tab on the TV cable and have someone hold the throttle full to the floor. Lock the tab down and mark this setting on the cable casing. This will be your maximum TV setting. Measure 5/16 in. back from that mark (with throttle still wide open) and scribe another mark as your minimum throttle valve setting. Then make a third mark halfway between both scribe marks (5/32 in. from either mark). Unlock the locking tab again and set the adjustment at this halfway mark to have a properly adjusted TV cable."
Sorry to hijack - your thread has gotten me into wanting to know more about mine. Hopefully, there's something you can use here.