Well I am new too the diesel world. But I recently bought a late 99 PSD. Guy told me he was having transmission issues, it wouldn't downshift, well he didnt know about the lockup thing, so I got a steal on that, and other than needing front axles, it just needs cosmetic bullcrap but 2 days ago, it started slipping really bad every since I power braked it . When I checked the tranny fluid it smells like burnt clutches . My buddy has a E99 truck and hes rebuilt his tranny 1 time before but he has a chip on his truck . My truck is not chipped but it has 251k on it . Motor runs great but tranny is going . It also has TC shutter when it takes off, and when it takes off it feels like your driving a five speed and your riding the mess outta the clutch. Transmission fluid looked dark grey . I think its a little past changing the fluid and the filter . Any thoughts or suggestions ? My buddy has a set of clutches if I need them but what else would I possibly have too replace ? Need some help on this ....

 

your entire tranny, have it rebuilt and be done with it.

 

Pretty much what TCR said, your TC is gone, you are slipping, and your fluid is burnt and gray (likely from metal shavings and clutch material), and you powerbraked it..... ....
That being said, your transmission is shot and needs to be rebuilt. If you plan on adding more power to it and abusing it more (powerbraking) then you need to get a built transmission. So... $5k. Then you can make lots of ponies and do whatever you want and your transmission will put up with it no problem.