7.3L E40D Torque converter?
 

Ok...so I'm new here. If I'm posting this in the wrong area, please let me know.

I just bought a 1996 F350 Crew 7.3L Turbo with the e40d tranny (if I'm not mistaken). It's sitting on the equivalent of 37" tires and has the subsequent suspension upgrades to accommodate that much tire. It doesn't appear to have much performance work done outside of a straight 4" pipe. Mostly cosmetic stuff as far as I can tell. I didnt' get to meet the previous owner so I'm not completely sure of what I have at this point.

Anyway, I bought the truck knowing that it had what the dealer called "a torque converter issue". It's rather difficult to explain, but to me it feels like it's just shifting back and forth...and not necessarily when it should. This is my first diesel, and my first Auto transmission, so I'm pretty new to this stuff...

Questions:

How do I know it's that torque converter and not the transmission?

With that size tire, will I need an upgraded torque converter to prevent this from reoccurring?

Where should I look for a good torque converter? Online? rebuilt?

Cost IS an issue. I have a limited budget to throw at this thing, and I have some other important things I'd like to address. I have some friends with most of the required equipment to get the transmission and driveshaft out of the way...are there any issues I should know before I tackle this job myself?

That is going to be an exspensive job and there is still the possibility that is isn't gonna correct your shifting issue.
I would start with the other cheaper possible problems.
A fault electronic shifter module or a sticky valve body.

I would do a tranni flush with new fluid and filter to see if that solves the prob.