Not sure what to do other than tear it down for inspection, sounds like a pitted ball bearing, I know there are no ball bearings in the 700, sounds like ka-shh-shh-shh, more noticable in third with trans warm, it even changes when going over bumps, sometimes it goes away entirely. It works great still and has nothing in the pan but a little dark gray sludge only on the magnet, it shifts great. The trans was built from a totally rebuilt and slightly modified 1990 2.8 trans internals put into a V-8 case with the V-8 input drum and high perf rear planet with the oil deflector. Any ideas on what is making the noise? Thanks in advance.

Noise in third tends to take the planets off the hook since they are spinning together as one but you could still have a problem with a bearing, particularly the one at the bottom of the input shaft that rides against the bottom of the pump stator. I would get it to make noise and see if pulling the TV Cable makes a difference. If it does then it is a hydraulic problem, if not it is mechanical. This is not as definitive as when you use a pressure gauge but I am assuming you don't have one. If you do then hook it up and look for allot of activity when the problem occurs. If the needle stays steady it is mechanical, if it begins to jump all over the place then it is a hydraulic problem, possibly a valve bouncing. If it does, try adding some fluid to see if it helps.

I have a pressure guage and will test it as you suggest. Thanks for your advice.