Blazer Forum - Chevy Blazer Forums - Engine Transmission Trouble

My daughter starting using my 1999 Blazer, 4.3 motor, 4wd to go to college this year which is about 10 miles round trip. Other than that it sat idle until I needed to haul a trailer/boat/pup camper which only happened a handful of times a year. I rebuild the valve body a few years ago because I had a slipping converter code. Then some time later the transmission burned the 3rd gear due to low transmission oil (long story). I took it to a shop and they replaced that. Been about 2 years since that.
2 Days ago we started getting cold weather and at the same time (coincidence?) then the transmission will not engage in any gear and when it start engaging it gets a little sluggish. The first day it did I was outside and noticed my daughter did not warm the vehicle up and just took off. She did call me from the side of the road telling me the blazer was not behaving right and when I got there (about a mile from the house) I noticed the card was not yet to normal temp. That night he car will not go in gear again and it will after quite some time. It has continued to do that for the next 2 days.

I checked it myself this morning After the engine been sitting over night. Transmission oil level is higher when cold that when warm. Looking at the dip stick it seems it should be the other way around. At either warm/cold the level is just a tad higher. If i shift into any gear the car will not move, if while shift in gear I start revving the motor it eventually engages. After that it continues to work fine although I did notice what I think are slips at 45 mph where the rpm will jump 400 to 500 up and down.

Can anyone help me with an educated guess? Overhauling the transmission is out of the question as I am planing on getting a newer vehicle comes march. I do all my mechanic but have never overhauled a transmission myself. I did have a video of how to overhaul this transmission and it dont seem too complicated but I am not sure I have the time. At any rate, I need to get an idea of what is wrong with it before I decide what to do with it. The last shop that work in the transmission is very flexible but I am still looking at least $500..

Thanks!