904 giving up the ghost?

So I was driving my Duster home from work today and the transmission started slipping, like it would go out of gear when off the throttle then when I'd get back on it it would go back into gear. It was pretty much all freeway but once I got into my neighborhood it started slipping really badly and I was babying it back to my house. Once in front of my house I immediately put it in Neutral and checked the fluid. The level was fine, perhaps a tad high actually but the fluid was still perfectly clear-pink and didn't smell burnt at all. So I put it in reverse and it didn't do anything; it would start moving slightly if I gave it a little gas so I was able to get it into the garage.

From talking to a friend who has experience rebuilding Torqueflites he thinks the line pressure is low. What would cause that to happen? Could the pump fail that quickly? I saw mentions of a bad seal that can cause the trans to lose pressure? It was quite hot outside today and this is the first time I drove my Duster in weather this warm since last summer, I read if the seal is on its way out the colder fluid will seal but when it warms up and thins out it won't seal anymore?

I'm kind of a newbie with Torqueflites, I understand how they work on a basic level but I've never been inside one other than to replace the filter or adjust the bands.