Transmission, bottom of the pan was covered in chunks of metal

It would make more sense to wait for a failure rather than doing a full rebuild just based on some metal chips. Those transmissions used round magnets that looked like big fat washers. They were always "hairy" from the stuff that stuck to them, but both versions, the 727 and 904 were really tough. It took more than a little debris to take one out.

The lack of a kick-down linkage isn't as big a deal as some people think. It's true it does set throttle valve pressure, but that has the biggest effect on shift points. When mine was disconnected, it up-shifted at 20 mph and 28 mph, regardless how far the accelerator pedal was pressed. There still was no slippage.

If the chunks are small flat flakes, gold or copper-colored, those typically shear off thrust washers between the drums. They should wash down into the pan and stay there where we panic when we discover them. Remember, they were there a long time before we dropped the pan for some other service, and found them. As long as they don't get sucked up by the pump, they won't cause a problem. The filter must be bolted on solidly. The goal is to keep those flakes from being pumped into a clutch pack where they would likely cut a rubber lip seal. When that happens, you'll have slippage in one gear, or engine runaway during one of the up-shifts. That is when slippage can become excessive enough to overheat and disintegrate the fiber plates in that clutch pack.

The hairy stuff that sticks to the magnet comes from the fiber coating on the bands. Those have metal chips in their linings. We know that stuff is going to wear off and collect in the pan. What you really don't want to see is large metal chunks. That would imply something is coming apart due to mechanical problems causing parts to hit each other. You'd observe other symptoms just before a major failure occurred. The best suspect for this would be an accumulator piston. Those don't come with any rebuild kit. Your best bet there is if you find you need to replace that, find a donor transmission at a salvage yard. If they don't plan on sending it to a rebuilding company, it will just be scrap metal to them if it has a problem.

None of that debris can be allowed to get into the valve body. Those valves have very sharp edges where they slide in their bores, to prevent a chip of debris from getting wedged between them. If you've rebuilt transmission before, you know there is an "L"-shaped gasket that sits on top of the filter. Some people don't know what that is for, so they leave it out. That is when I'd be worried about that debris in the fluid

Yes, you must have the throttle pressure rod connected and adjusted correctly or the transmission will burn up. Here is a video that will walk you through the steps of removing the unit for rebuild:

https://youtu.be/3vJAojsrfuU

Please let us know what you find. We are interested to see what it is.

I've never seen chunks like that in a pan.

I did have a catastrophic failure about 30 years ago. Stepfather crashed Ma's '78 LeBaron wagon after skidding on ice and sailing down a rocky embankment. The shift lever was off half a notch after that, so you know something got bent. Years later, while heading home from an out-of-town tv repair job, I intended on shifting into neutral to coast down a long hill, then up to my turn-off. Well, I shifted it right into reverse at 55 mph! Snubbed the engine off, coasted around the corner, restarted it, and took off with no apparent problem.

A few months later I noticed a vibration at highway speeds that would come in for about one second, then go away for one or two seconds. This happened so gradually, I'm not even sure when it started. This went on for about three years, and since the car kept on going, I kept on driving. Was heading to Chicago one day, and got to a small town 80 miles from home where I had offered to drop off a tv remote hand unit. When I pulled up the guy's business, I heard this horrible banging noise, much louder than that of a broken flex plate, if you've ever heard that. Stopped the engine, and as soon as I hopped out of the car, transmission fluid had created a puddle wider than the car.

Did my business, ran next door to an auto parts store and bought a case of transmission fluid. Jumped in and headed for home at over 80 mph. This was before cell phones. I figured if I got stopped for speeding, I'd let the cop call for help, and if I didn't get stopped, I was going to get as close to home as possible before I had to call a tow truck. Darn if I didn't make it all the way home, still banging away, and it dumped another huge puddle right where I stopped the engine.

To bring this horribly exciting story to an end, when I shifted into neutral at 55 mph, it probably cracked the snout on the torque converter. (By the way, it had been replaced many years earlier with a non-lock-up converter). That is what had been causing the pulsing vibration. When I pulled it apart, 80 percent of the snout was gone. There was just one little finger, about 3/4" wide, driving the pump. That was what got me home.

I tried to rebuild that transmission two times before I gave up. I've always had trouble with the outer lip seal on one of the clutch pistons, and sure enough, it always slipped in third gear under hard acceleration. That was a 904. Finally I gave up, rebuilt an old 727 I had laying around, and stuffed that in with a 4" shorter drive shaft. That one worked fine until the car got too rusty to drive. I almost missed my driveway one day because the body had flexed so much, the steering shaft was binding. If I watched out the side mirror, I could see the rear doors "breathing" in and out as I went over bumps. When sentimental value evaporated after many more years, and I wanted to haul it to the scrap yard, I lifted the middle 15 feet off the ground with forks on my skid steer, and the wheels were still on the ground!

As a point of interest, the town is Coloma, WI which must be avoided at all cost. One night, coming home from a training class in Chicago, I roasted a front wheel bearing on that car. Ma had to run down with my tool box, air tank, and a box of used wheel bearings that I knew right where they were. Another time, same car, the left rear tire picked up the leg insert a caster pops into for something like a dresser or table. I had my air tank and impact wrench with me, so the pit stop on the side of the highway took less than five minutes. I was back on the road just as the trucks I had passed a long time earlier were catching up to me. Didn't even lose a lap.

Now I sweat with anticipation every time I get near that town.

I've been told 727s are so tough, you can rebuild one in a sandbox and it will work. I wouldn't want to try that, but it does say my horrendous success was nothing to brag about.

What happened to your torque converter? If it's the original transmission, it doesn't have the lock-up converter. Those didn't show up until 1977 with the big blocks, and 1978 with all the engines. The entire newer transmission with the lock-up converter can be used in older cars because everything was internally hydraulically-controlled. There were no computers or solenoids. They did have one common characteristic where they tended to lock up at 35 mph, the perfect speed at which it constantly bounced in and out of lock-up on city streets. There is one spring in the valve body you can stretch slightly to make it not lock up until around 45 mph. I never did that with the transmission in the car, but I watched a coworker do it. That can be done during a routine filter change to solve that minor irritation.

To answer your question about the accumulator piston, I only mentioned that because it is the only thing I can think of that could break into chunks and show up in the bottom of the pan. The kick-down linkage is a different issue. The lever on the transmission will stay wherever it is. There's no spring on it, so if it's in the throttle-mostly-open position, up-shifts will occur at too high a speed, and it may not go into third. It will also down-shift too soon as you're slowing down. If it's sitting in the idle position, that's where there won't be enough line pressure to hold the clutch packs solidly engaged. The slippage is what overheats them and tears them up.

This also depends on what is missing or disconnected. When this happened to me, the linkage fell off right at the rod on the carburetor. The rest of the linkage is spring-loaded, so it pulled the throttle lever back to idle position. Luckily everything was there to be reconnected, so I didn't drive it very far that way. It's when the linkage is disconnected at the transmission, or that part of it is missing, that there is no return spring involved, and the throttle lever can sit anywhere.

Please keep us informed of your progress.

I feel for you. I don't whether to laugh or to cry. I have a '72 Challenger in my buddy's body shop for over 15 years. Seems my stuff always gets done last. A girl in a Taurus turned in front of me, and I destroyed the rear half of her car. Had I had the presence of mind to just tug the fender out on mine, I could have driven it home. Didn't even break the head lights.

Since there was some rust on the car, I had my students pull everything apart, then I made a frame with casters so the body could be moved around the shop. Three people were able to lift it up onto a trailer. I had already gone through all the wiring, painted the dash, worked on the gauges, fixed the original clock, etc. A few years earlier, but now here I sit waiting for the body so I can build my car. I need it desperately so I can go out and pass people when necessary. Just like little college students search real hard for a reason to be offended, I search real hard for the need to pass people. Sometimes I have to drive back and forth on my highway a dozen times before I find someone who needs passing!