This just happened to a friend. Very cool car though not a 3rd gen. 53 Studebaker with a Gen 1 small block and T56 transmission. Stock or close to stock hydraulic clutch. 4.10 geared 9 inch Ford.
Anyway, the transmission was installed (without being disassembled) at the shop where I do most of my work. Bought off E-Bay out of a burned out 4th Gen Firebird. Not sure of the year exactly. The trans does say Borg Warner on it although I've read that Tremec took over manufacturing in 98. Or so says the internet.
Filled with nearly 4 quaqrts of ATF and it was noisy from the beginning. 5th and 6th gear at and beyond 2000 rpm.
It took about 3 or 4 hours of city/highway driving before it more or less gave up. Here's the e-mail I got from the owner describing how it went kaput.

"The trans did not get noticeably noisier after our test drive, in fact found a couple of rpm spots where it was quieter. It was hot.
Seemed fine just noisy, shifted well, there seemed to be cyclic vibration/noise at highway speeds.
Continued at highway speeds, speedo is way off so not exact sure, wasn't the fastest, wasn't the slowest guy on highway.
About 3 hours in there were 2 big clunks and hitches, like trans was gonna lockup. Clutch, neutral, side of road. Underside coated with atf.
Car will shift but will not move, something locked or??? Reverse works, backed and tried forward a few times no go in First. Tried 3rd that worked. Third on shoulder for the next mile to my exit, and to the gas station.
Tried 1st/ 2nd while in parking lot and they worked, but can't trust it now, and a sheen of oil everywhere...
Tow truck and home."

I haven't researched a thing other than a few inquiries as to fluid capacity and type. Found a few 5/6 gear related noise issues as well.
Ideas? Other than the thing is screwed.

 

Trans. needs pulled and gone through.

How far it was driven while low on fluid will be key as to how much damage there is.

 

I hate stories like this. This is why I never use used parts. 4 qts is the required amount, not low at all.

 

I don't like used parts either but sometimes...
As far as fluid level, it was full to start with and noisy then. Driving a few hundred miles apparently pushed fluid out and probably made things worse.
Just curious as to how these transmission expire in general. Everything has a service life.

 

Usually, poor clutch hydraulic system performance leads to the gear / slider teeth clashing. Especially on the LS1 hydraulic throwout bearing setups.

Slider over-travel allows the keys (mostly 3rd/4th) to drop out & get sheared by the slider or otherwise broken. 1-2 (unique keys) and 5-6 are subject to key problems less frequently.

The shift lever cup (shifter plugs into it) will be sheared by the offset lever if it is not glued down w/ correct product. This hurts shifts all around.

Shift forks can wallow their hole that fits over the shift rails. Only 3-4 was upgraded to iron around 2003.

Severe duty can heat & kill bearings or start to push the counter & main drive-input apart from each other; a pump helps here.

and on and on. Need that one rebuilt? Let me know.

 

My T56 has been noisy for years. Sounds like marbles in a can with the clutch pedal isnt depressed while it's in neutral.

Always runs just fine. I think these things run on magic fairy oil. You let all the oil out unfortunately.

 

[QUOTE=InfernalVortex;4965755 I think these things run on magic fairy oil. .[/QUOTE]

I'm not sure of the correct type of fairy oil....