Incident first occurred on 6/20/2010, on I-64. I was driving our 2004 Mercury Monterey when I realized that the transmission had slipped from D3 to D2. I stopped van and it worked fine after restarting, but was afraid to use it; only used several times for short trips in the interim - no problems, however, with the transmission. Took to dealer on 7/30 - 41,779 miles - extended warranty (esp) expired 2/5/10. Dealer replaced transmission range sensor and brake pressure switch at a cost of $325.22, including diagnostic check. Dealer also flushed and filled transmission - twice to remove water - cost: $184.87. I asked for the old parts - dealer did not return them. Picked up vehicle on 8/1/10; transmission worked fine, but the traction control system (tcs) light turned on and stayed on. Did not drive until 8/6 when I took it tire shop to have tires replaced - no cruise control and the tcs light was on. The service manager at the tire shop checked alldatapro.com and found a tsb that indicated that Ford had learned that some 2004-2007 freestar and Monterey transmissions had water/moisture problems causing problems with the tcs, among other things. Also, in checking other complaints reported to NHTSA, found one where a Ford dealer noted that a transmission seal had failed allowing water to enter computer (transmission range sensor?) causing both computer and transmission to fail. On 8/7, found that dealer had not reconnected cruise control, and noticed that the tcs light turned on after depressing the brake twice. Then noticed that the transmission would not shift to drive 3 - stayed in D2 - back to the original problem from 6/20! stopped and started van again, no change in the transmission, and the tcs light turned on after pressing brake twice. Have not tried to drive the car today, and now, after reading many of the complaints regarding transmission failures in 2004 Montereys, I'm not sure if I should even attempt to drive it the 38 miles back to the dealer.

- Richmond, VA, USA