It drives and shifts fine other than when I let off sometimes it's freewheeling like the rpm's drop, but when you go to accelerate again, you have to make up that rpm difference before power engages again. What kind of a problem is that. I'm also not sure the torque converter is locking up. Any ideas?

 

In what gears?
1,2, and 3rd or just one?

It could be an issue with the overrun clutches.