We're home now.
Jesse, I fully agree with the information in the munroe reference...but that stuff is in regards to drag race stuff, that entire section is based upon that...and for engines that develop much more hp/torque than any built-for street/trail IH sv motor. Those motors need heavy tranny mods in order to operate correctly...and, they are installed and run in vehicles that are far lighter than any oem or modded Scout II and are purpose built for only one purpose!
What you have experienced with the 304 and it's companion transmission is an anomaly, not the norm. You have/had a performance issue regarding the package. Ya simply can't compare that with what you will see in the future! If this shift point/rpm/road speed deal was engineering problem, then all vehicles of a similar production form would have operated the same. And all 727 trannys that have been rebuilt correctly in the past would have simply continued in generating performance complaints.
I'll not comment on "how" your failed tranny was built as I've not torn into it for a diagnosis! But without a teardown, there is no way to determine what happened and why. Can parts undergo catastrophic failure for no apparent reason? Of course they can, otherwise us mechanics would have nothing to do! But...compare the service record of the torqueflite family over the years with the same information regarding a 700r4, th400, or th350...look at all the "fixes" that have been developed by the aftermarket for those transmissions to live just behind a wimpazz v6 GM or 305 sbc motor, then look at the same for a 727! One supplier catalog I use daily shows 50+ pages, hundreds of individual upgrade parts and "fixes" same catalog shows approximately eight individual fixes spread over 20 years of tf 727 (does not include the 518 and later crap) on six pages. And out of all those individual "upgrades", five of 'em are addressed with the installation of a transgo tf-2 kit.
And when using a heavy rig for off-road or trailer towing apps, ya use the transmission gear selector lever to make it do what ya want it to, the "normal" auto-shift routine goes out the window!
A valve body that has had a shift improvement system (so-called "re-programming") will allow an infinite amount of tuning, it does away with overlap/slip, greatly reduces heat production, and adds much in the way of operator controllability. Don't like the way the "autoshift" function works, then shift it manually all day long, a 727 loves that kind of treatment.
Just did an 1100 mile pull with a gross load of about 11.5k lbs. This trip (well under normal cross country loadout). Only on the flats do I let the tranny have it's head...on the myriad ups and downs along hiway 101 and crossing the coast range it gets manually-shifted, that helps fuel economy and reduces wear and tear on the brake system. Same as when running a manual trans.
And this current toad setup has seen 23k miles operated on "roads" ranging from both doubletrack off-road trails all over the kali-desert, to nearly every freeway in the bay area, lalaland, phoenix, dfw, salt lake city, san antonio/austin, and up to mountain passes of 9.5k ft. And all the godforsaken "interstates" in between.
And with a properly tuned engine, a purpose-built (rv/towing use) 727, any IH vehicle can experience the same...even with a 304 which is really I feel the "best" truck engine.
As for an unplanned "downshift"...again, that is big part of why the "partial throttle kickdown" module was developed for the 727...that allows the trans ratios to better match engine rpm/load. With a non-partial throttle kickdown module, the throttle must be wot to effect kickdown under most conditions (but not all). That partial throttle deal went hand in hand with emissions and fuel economy "improvements" at a time in automotive history when overall drivability of all u.s.-production vehicles for consumer use was at an all time low. And if ihon is gonna work with ya on the valve body upgrade, then we need to know "which" valve body is gonna be used before a plan can be finalized. I have no preference for one over the other for any use.
Again..you are talking about a totally different engine (that hopefully does not have any drivability issues), along with a totally different transmission. No way you can compare "before" and "anticipated after" until ya got something to compare! Your former drivetrain package was broke, hopefully the new package wont' be...and if it is, then ya simply make it right!