94 Overdrive/Lockup Switch questions...

You definitely shouldn't have lost it like you did. Once you flip that valve and spring it should always downshift.

I personally wouldn't want it to downshift locked unless it was in a competition situation.
 
It's not hard on it at all if you do it right. I roll into the throttle and hit the od off at the same time. It's about as smooth as a factory shift that way. Much smoother than a locked up shift.
 
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