1985 150 ford aod transmission will not shift 3rd. and overdrive does not shift out 1st. or 2nd. till 3000rpms.

I tried the DIY service and repair manuals from a website and it actually helped
me repair transmission problem in my ford explorer. it wont move forward or reverse, engine is good both solenoids for forward and reverse work.
I don't have much technical knowledge but I just followed it step-wise, and works perfect! got it from www.reliable-store.com

Assuming it is full of fluid, normally I would say its a pressure problem inside the trans. But is it possible the shift linkage is not back together correctly ??

it may be a bad transmission modulator valve located on the side of your transmission,vacum operated. a sudden downshift or forward shift when unexpected is sign of a bad modulator valve or a vacum leak to the transmission.best to shop around for a garage w/references when it comes to transmission work though. check all the vacum lines to your transmision,you need to look on the underneath side of your truck on the side of transmission for a loose or disconnected vacum line on the side of the transmission. when you feel the vacum line,follow it to the top of engine,the vacum line is about 3/8th line,and may be disconnected or losing air. to make this short,when you drive the car,start out in low gear and shift the transmission,manually from 1st to 2nd to 3rd does it do right with no slipping? if it does this right and shifts great manually,the modulator valve on the side of the transmissions bad,or a bad vacum leak in-between.thank you for choosing fixya.com

When was last trans fluid & filter change? Should be done every 30k/3 years or sooner of you do any towing. I'd start there and get it flushed thoroughly.

You most likely have a broken sunshell inside the transmission. They tend to go out when the transmission is shifted to drive when while still rolling in reverse.

bad transmission

I dont think that will work ....1988 was aod and aode trans

The AXOD-E was renamed AX4S in 1993. In addition to the name change, improvements in the lubrication of the gearset and capacity upgrades were made. A centrifugal piston assembly was implemented in the intermediate clutch position to improve 1st-2nd and 2nd-1st shift quality and an increase in the clutch's durability was made on some models. High energy friction materials were also introduced. A new twin piston torque converter clutch (TCC) was introduced with the AX4S and the AX4N on some models. The transaxle pan on this model will sometimes read "AXOD Metric" since it's based on the AXOD transaxle. The data plate code for this transmission is "L."
Applications:

• 1993–1994 Lincoln Continental
• 1993–2003 Ford Taurus
• 1993–2003 Mercury Sable
• 1995–2000 Ford Windstar

The Ford AX4S automatic transmission is a four-speed electronic overdrive transmission used in 1995 to 2000 Ford Windstar minivan. The transmission is also used in 1991 to 2003 Ford Taurus and Mercury Sable, and 1993 to 1995 Ford Taurus SHO models. The AX4S is a second-generation version of the AXOD and AXOD-E transmissions used in 1986 to 1991 Ford Taurus.

Honestly, while there is a chance that there is a bigger problem, it sounds more like its time for a transmission service. Hard thunking shifts when starting or stopping with no other apparent symptoms on older vehicles can usually be corrected by a transmission flush. if you pull out your tranny dipstick and the fluid is any darker than bright red and/or smells burnt (smell should make you cringe a bit) then take it to a shop and get it flushed out. I recommend a service center that uses a BG power flush unit. These services seem expensive on the surface but only have to be done about once every 3 years and can prevent more costly and involved repairs down the road.

Go to this link.

Yes, it could very well be a bad transmission.