Cant get auto transmission in 89 GQ auto to go into diagnostic mode.

[ckh]

OK had torque converter replaced, a O ring is what was stopping lockup, as presure was blowing by it, now new problem.
1 at around 90-95ish every now and then the lockup will drop out for a split second, can see the tacho jump for a fraction of a second, if I didnt have a tacho wouldnt even notice it.
2 Cant perform self diagnostics on transmission like I used to, go though the normal proceedure and when I press the accelerator pedal, the power light just stays on, on this I noticed in this proceedure is when I put it in first and hit the power button the lock button on the side of the shifter doesnt come out. If I start the car up its will drive in first gear if I select first, I'm just pulling my hair out with what is stopping the system from going into diagnostic mode reading the manual it say if the power light stay on and doesnt go though the test its either Inhibitor switch, power shift switch, kick down switch idle switch or the A/T controler is damaged.
I'm assuming kick down is working and when driving, it kicks down when I floor it, everything else seems to be doing what its supposed to appart from the intermitant unlocking around 95, if I'm doing a 100 or more it does seem to unlock at all. could the fact the button on the side of the shifter isnt coming out, be the problem, and the computer doesnt see its actually in first for the next step in the diagnostics? Took it back to the tranny guy at underwood, he said not to stress about the computer not doing the diagnostics, or the fact that it trips out of lock up intermitentally, if any one can give me juggestion on what the problem could be I'd appreicate it, is the button on the side of the shifter supposed to come out as it does in every other gear I select?