new to me XJ wont rev 1998 2wd 4.0 auto 65k original miles

[Jjona5]

So I have one of the clusters that doesn't have a tach and I forgot to check the RPMs when I had my scan tool on it but it has good fuel pressure(gauge showed right at 50psi even when it starts to lose power). When I rev the engine up it just kind of slows down and runs odd. No hard miss. The transmission is also bad and the fluid looks super cooked and also smells almost like diesel oil(I bought it like this). It has low miles 65k and came straight from Texas A&M. When it loses power it almost feels like early traction control when the power/timing gets pulled. No codes and it runs super smooth with no abnormal sounds. I haven't checked the TPS voltage but I did watch the throttle percentage when I had my scan tool on it and it changes smooth with no jumps. I saw some videos where people have clogged cats in these and that might have contributed to the smoked transmission. Do you think it would be worth cutting the exhaust in front of the cat to see what it does? Ideas? I have a used late model transmission I plan on swapping in when I get time to do the whole job.

 

[Jjona5]

Looks like it might just be the transmission. I took the exhaust off at the collector and it did the same thing. Went inside the jeep to check the rpms at which it wont rev past/bogs down and while I was on the throttle it jumped forward(was in park) trans kind of locked hard and it lurched. The shifter inside is moving as is the one on the side of the transmission. Going to pull it when I get time and swap in the used good one.