[Timberwolf]

I think that will be the valve body.

What happens in that case, from what I understand, is:

1. TCM requests second gear disengage and third gear engage.
2. Pressure valve moves, gearbox disengages.
3. Pressure valve moves, third gear engaged.

(Not sure which valves are involved, although I think from what I recall 3rd gear involves the well-known B4 solenoid.)

If you get a delay between (2) and (3) above, then the gearbox will be in neutral for a time and the engine free to rev up. This can be caused by old fluid causing the valves to stick, or some other valve body problem. The B4 servo cover is also a problem on 2001 boxes, serial numbers around 01C-01L (March '01-December '01 build date) if I've remembered correctly.

The danger is that the sharp "lurch" is two bits of gearbox moving at very different speeds coming together - a bit like revving up the engine then dumping the clutch in a manual. It's what, over time, helps cause the entire box, rather than just the valve body, to die.

btw, have you had the B4 servo cover checked out? It's a known issue on 2001 models, and 2-3 shift flares are one of the most common symptoms for it having failed. Dead cheap part, saves replacing an entire gearbox later.