You're going to have to forgive me here, since I haven't worked on one your kind of transmission before. So we're talking about 4th being OD, is that correct? This is not a five speed automatic, right?
If that is the case then it is very possible for the friction plates to have worn down for third gear. The vehicle is never going to hit fourth since that is a locking of the torque converter, and it needs to achieve a specific output RPM before it even considers locking up.
The only way I can see short of a defective transmission, for 3rd to go out, is if this vehicle is a highway, or cruising vehicle, and saw a lot of frequent harsh down shifts at highway speeds. I mean "a lot". It's more typical for the plates in 2nd to go, as they typically are used for reverse as well, in most transmissions.
The other option is that the valve body has gone bad, and needs a rebuild.
Well, no matter what you're likely looking at a rebuild. As was suggested before you could go the junk yard route, but that's a lot like playing the lottery, and I have to admit, I never liked those odds. You never really know what you're getting.
Pull your dipstick, and give if a sniff, if it smells like almonds then you have some burnt friction plates. If that yields no help drop the pan, and search for metal flakes. Dark matter in the bottom of the pan is to be expected to a degree, as is a small amount of metal filings that will collect on the pan magnet. Over abundance of these could indicate worn plates, and steels.
Your problem most definitely sounds mechanical.
Good luck, and keep us posted:great:
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