Help troubleshoot 904? Slipping at higher RPMs

I think it's a strong possibility that it might be the converter, or not the trans at all.
By the time you realize it's slipping it is also burning clutches and would make the fluid dark and burned smelling. (Is it?)

The "dropping off" and then back on solid just doesn't make sense, and I think it's way more of a possibility that it's something to do with the engine instead of the trans.
Is it possible?