Okay, Paul. I finally had a free night to tear into my C4 and I found a layer of dark gray silt about 1/16" deep in the pan, it was also all through the filter and valve body. The insides look clean otherwise and did not smell burnt at all. The fluid was reasonably clean, despite the layer of gray silt on the bottom of the pan and in the valve body. So is this a bad sign or normal for a trans in need of a fluid and filter change? The transmission shifts nice and firm after it warms up and seems to have no other issues other than not shifting into third gear when it's cold. I've cleaned everything, should I go ahead and reassemble it or is this a sign of impending terminal failure?

Second question. When I took apart the valve body, I tried to be careful not to drop the check balls out before I could see where they go... well you know what happened next so I know one goes where the red circle is below.... but where does the other ball goes?