I'm not positive because this was never an issue with my transmission, but I believe the shift flare was problematic between gears 2-3.
If your transmission is slipping and the fluid smells burnt, a rebuild might be in your future. How long, who knows?
Also, you are about to get into a huge debate whether flushing a transmission that's questionable will help or hurt it.
Do a little searching about the vaalve body gasket. I can't help you too much with what's involved. Obviously a gasket