I have a '94 Cadillac Fleetwood with the 5.7L LT1 V8 engine and 4L60E automatic transmission. The car has 150k miles and I just purchased the vehicle a couple of months back. I was told by the previous owner that the transmission had recently been rebuilt. I took the car to two smog checks where it failed twice. I suspect a bad EGR valve, cat. converter or O2 sensors might be the cause so I'm going to have those replaced soon. Well the day before the transmission problems started occurring I had been driving without a gas cap, which I lost at a gas station and since been replaced and I also degrease the engine. I let the engine cool down and later sprayed down the engine with the degrease and let it sit for 15 minutes. Then I sprayed it down with cool water, I saw some smoke coming out from what it seems to be engine or transmission but didn't think much of it as it later went away.

Well the next day I felt the engine jerk whenever I hit 25mph, after the 25mph mark the car ran smootly but whenever I decelerated and again hit 25mph the engine jerked. I also got the service engine soon and traction control lights on. I checked the transmission fluid and the level was fine so I read the codes which gave me a throttle position sensor error which I later had replaced. That didn't help as the car won't go over 25mph on @ (Automatic Overdrive) or D or 3 (Third Gear) anymore. The transmission fluid has also turned brown with a mix of black (which may mean the dipstick is just dirty?) I was told by the owner this might have been caused at the smog check as the mechanic might had forgotten to turn off the traction control causing the transmission to burn fluid.

The thing is that I can drive fine and smooth when driving on 2 (Second Gear.) What should I do? Thank you.