Had the same problem. Could be a number of things. Bad switch, loose/bad OD solenoid, bad relay somewhere, bad ground, bad 'puter. Here's the history on mine:
First replaced switch(First at the Dealer- they screwed it up, took it to my mechanic-fixed it right)
Replaced tranny and all tranny electrics (needed it anyway and it was planned).
Still had OD that would work sometimes - kick in or out a the most inopertune moments (like going 80 on the freeway and BAM- downshift). Sometimes it would flash in and out just sitting at a stoplight. Turn it on - it goes off and visa versa.
A full reset of the ECC would cure it for a while but it would slowly start failing again. Noticed that it would be OK in the morning when I first started out but would start up again (failing intermittently) after a bit of running here and there. Acted like it was heat related somewhere.
Reasoned that it may be a weak heat sink or something in the 'puter or a bad relay or ground. I always go the easy route first and I really didn't want to start poking wires so I found an ECC with no known issues and replaced the computer. (Thanks Rick) Haven't had a problem since.
In retrospect it may not have been the ECC and just the action of R&Ring it reset the connections. Kinda like reseating the boards on a screwy computer. My money says it was the 'puter,though. If replacing the switch doesn't work - start there.
