Ive got a 96 4wd with injecyers a new pump different converter and tranny rebuilt. Recently driving at around 60 it cant seem to pick a gear it goes back and forth between 3rd and 4th . I checked fluid has plenty but was very aerated (all bubbles on the diop stick) is this normal?

 

Doesn't sound normal to me. Are you sure your tanny isn't over filled?

 

Sounds overfilled.
Are you checking the level with the engine running tranny in N?

 

Are you sure it's shifting in & out of OD, and not in & out of lockup? Shifting in & out of lockup is common if your TPS is dirty, just another possibility.