Ok folks...whats the truth about the E4OD transmission? Just bought a 1994 XLT extended cab two wheel drive. Trans doesn't seem to be acting up, but I'm reading that these trannys are prone to failure. Had a Chevy truck before and the only thing that did not give me a problem was the 700R4 trans. What do I look for for indication of failure? Fluid does not seem to be burnt, but there is a slight shudder when shifting to second gear... truck has 135k and a 302.

 

The E40D is an OD adaptation of the C6 and is just as bullet proof.
I'd suggest having the tran serviced including draining the torque converter and installing a new filter. Refill the tran, preferably, with ATF+4; if you're uncomfortable using Chrysler fluid in a Ford then, then go with Mercon V.
FYI: Mercon V applications include those where ATF+3 and +4 are used. ATF+4 is superior in service life to Mercon V, so I go with +4. In addition, the Chrysler fluids are designed specifically to prevent clutch and band shudder.

Some good info on the trans can be found here:

http://www.becontrols.com/tech/ch6e4odinfo.htm

Good luck