Wow. Sucks man. Honestly this is the first time i have ever heard of this happening. I hope it works out for you man.

 

Didnt skeet have this happen???

Ive heard of it about 5 times now. Two of them where on fresh built transmissions too!

 

If it looks like a strawberry milkshake it's already mixed and already soaked into the clutches. It's just a matter or time before the clutches fall apart, as it sounds like the band already has. Trans and converter needs to be freshened.

 

To be honest I think the water in the oil goes after the valve body and case gaskets first. Myself I would pull it and have it freshened up.