727 3rd gear feels more like a down shift

I agree with belmateo, too much shift overlap.
This could be a VB issue but I doubt it.
Here's the thing; the same oil circuit that energizes the hi-drum for third gear is also the one to depressurize the second gear band. It is supposed to happen simultaneously.
If you had said second gear was sluggish, I would have said that the hi-drum is likely piled up. But since you didn't, and since reverse is fine (which also uses the hi-drum; I have to think that the band is not releasing, or rather that the servo is not retracting.I know of no way for this to occur
But it doesn't really matter. In MO the tranny has to come down.
I don't see a hydraulic pressure test for this.
But you might be able to check the servo by taking off the VB. And you might get to see the servo in action with doing an air-pressure test.
So, then, I recommend an air-pressure test.