What could cause a freshly rebuilt 4l60e to have no engine braking?

Everything else appears to work.
I wouldnt think overrun clutches as they are new.
Possibilities?

 

I assume you know that engine braking (overrun clutches enabled) only occurs in [D1] and [D2], and only in [D3] when in 3rd gear?
(The table in the ATSG manual showing overrun enabled for all gears in [D3] is wrong; it is only in 3rd gear.)

Other than that, perhaps the inner or outer seal on the overrun piston was cut or forgotten. It is the most difficult piston to install.

 

I only get engine braking(4th gear) when convertor lock-up clutch is engaged, it's always been that way. Cruising on the freeway at 60 and let off the gas on an off ramp and engine braking is occurring, as vehicle slows to about 35-40,lock-up clutch disengages and rpm goes to idle. 1st,2nd, & 3rd provide engine braking.

 

I get no engine braking when the selector is in 1 2 or D it just drops to idle

 

Bummer.
The overrun clutch is completely controlled by the valve body (VB), not by the PCM.
It could be a leak in the VB, the VB gaskets, the pump or an input shaft teflon ring. Or as I mentioned an incorrectly sealed overrun piston. I suspect one of the later two.
Did you rebuild the trans? Did the builder air test the input drum, both by itself and installed into the pump?

 

I had someone local build it. I have no idea what he tested.


OK, so I guess the next question. What are the long term repercussions of driving it like this?

 

Since there never is significant engine braking in [OD], I don't think there is any repercussion. Unless you drive mountains and want to downshift on the long downhills.