http://www.thetruckstop.us/forum/threads/4l80e-transmission-problems.12979/
Found this website and this article basically explains my issue, I was pretty sure it was the torque converter, this just re-assured me of it
Article:
No shift into OD under acceleration; OD will not hold under load and can hear or feel trans shift to OD when throttle is let off but slips into 3rd when throttle applied; sudden erratic lugging condition in lower gears when manually shifting: Bad news: this is going to involve a lot more time and money to fix this problem. The torque converter needs to be replaced, which requires between $300-$500 for a replacement, lockup, 4L80E converter. It is imperative that the replacement converter you choose is a lockup converter. The transmission will not hold in OD when there is a load on the drivetrain if the torque converter will not lock. The torque converter locks up (to make a solid, non-slip link between the engine and trans) in an effort to increase fuel efficiency and thereby reduce emissions on highway driving trips, when there is no heavy load on the vehicle (trailer or heavy weight in the bed). But, OD is a cruise gear, not a pulling gear, and as such to prevent the OD from burning out (from constant 3-OD up and downshifting and straining the OD with a 9,000 lb trailer) when towing something under load, the trans will force itself out of OD into 3rd when it detects that the converter is not locking up. The factory converter has an internal clutch that controls the lockup of the torque converter, and this clutch's torque capacity is minimal. Hence, if the clutch is going bad, just the weight of the truck and torque required to pull it will force the TCC to unlock the converter and a downshift to 3rd will occur. The lugging in lower gears (mostly first) is due to the converter locking up prematurely. Additionally, if left long enough, a look in the trans oil pan will reveal burnt fluid and black sediment. If there is black sediment in the pan before you notice drivability problems, it will soon be time to replace the converter. To replace the torque converter, you must either get the truck to a shop or have at least 2 jacks handy, one of which will be a transmission or motorcycle jack. An extra person to help out is a great asset, as the transmission weighs close to 200 lbs. This repair will take you about 6-9 hours to complete if you know what you're doing. Remember to fill the converter with as much fluid as you can before you install it. Don't worry about it all spilling out upon turning it on its side during installation; the fluid is slow going in and is just as slow coming out. At the very least, this is a good excuse to upgrade to a new, high performance converter with a little more stall speed (and a valid justification to the wife to spend $500 on another performance item!).
