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This is a common problem with Chrysler corp transmissions. This is called "limp mode". It was designed to help you get home in the event of trouble. The transmission comunicates with the transmission, When it sense's a problem it goes into limp mode. The only thing to do is take it to a transmission shop and pay for the diagnosis. 90 percent of the time the transmission needs to be rebuilt of replaced from about 75000 miles and up.

You may just need to have the fluid and filter changed. Do you have a lot of miles on the car? That's the first thing I would do. It's also the cheapest route to go.

I can't recall where I read this at originally (it was online but it was a reliable source, that much I recall at least) but the problem may be a defective aluminum seal in the transmission. It lets in moisture. To repair you will need to completely drain and dry the transmission then fill it up with tranny fluid. It's not good enough to simply drain the transmission. You must open it up and let it fully dry. To stop this problem from recurring replace the alumiinum seal with a steel one (they are less likely to warp in hot and cold conditions). Any reliable auto repair shot that specializes in transmissions should know of this problem and how to fix it. Just ask them about a bad seal in ultradrive transmissions and if they can drain, dry and replace the seal. See below for more info (nothing on the moisture part specifically though, sorry).

http://www.autosafety.org/article.php?scid=100&did=563

http://en.wikipedia.org/wiki/Chrysler_42LE_transmission

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Q: Why would a 1994 Chrysler New Yorker sometimes not shift from 2nd to 3rd?
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