Tranny slipping

Whether service is needed depends on how many miles it has been since that was done last. Shuddering during initial engagement is often a sign of using the wrong transmission fluid, although that will usually occur again at around 40 mph when the lockup torque converter engages.

Defaulting to second gear and staying there until the ignition switch is turned off and the engine is restarted is "limp" mode to allow you to drive slowly to a repair shop without needing a tow truck. At that point it is important to not disconnect the battery or let it run dead because there is going to be a diagnostic fault code stored in the Transmission Computer. Disconnecting the battery will erase that code, then that valuable information will be lost.

The first thing to do is have the diagnostic fault codes read and recorded. This is usually not something that can be done at an auto parts store where they do it for free because most of the time they can only read fault codes in the Engine Computer. A transmission specialist can also read the "clutch volume index", (CVI). That is a set of four numbers corresponding to the volume of fluid it takes to apply each clutch pack. An experienced mechanic can tell how much life is left in the clutch plates based on those numbers.

I suspect there is something else going on to put the system into limp mode. The Transmission Computer watches crankshaft speed and road speed, then calculates if those two agree. If they do not, it is due to slippage in one of the clutch packs. That slippage doesn't have a chance to occur yet when shifting into drive. That slippage is most likely to occur during an up-shift under moderate acceleration.

The brand of transmission fluid isn't the issue. We used to have Mercon for Fords and Dexron for everything else. Now there's Dexron2, ATF+6, and many others. I've heard stories of people having problems with what was listed as being for a certain transmission but still having problems. When I worked for a very nice family-owned Chrysler dealership, we always used transmission fluid from the manufacturer and never had fluid-related problems. Not all aftermarket brands cause problems, but when there are slipping, shuddering, and chattering problems, that's the first thing we ask about.

I suspect you have some other issue because that shuddering almost always occurred when the torque converter clutch locked up at around 35 to 40 mph. We didn't see problems at initial engagement like you described. To check for that torque converter shudder, drive in the highest gear with the engine warmed up, and close to 40 mph. Hold the accelerator perfectly steady, then lightly tap the brake pedal. Tapping the brake pedal will make the torque converter clutch unlock in preparation for slowing down, but then it will relock about two seconds later. If you feel the shudder each time it locks up, suspect the wrong type of fluid was used. To verify the converter unlocked, if you have a tach on the dash, you'll see engine speed increase about 200 rpm for those two seconds. If you don't have a tach, you might hear the engine speed pick up a little.