Sounds like its low on fluid level when you describe it "revving" and then jumping into gear. That is the same as "slipping". Its not engaged, then it engages quickly, its slipping momentarily, which can be caused by incorrect fluid level as one thing.
Im not familiar with the electronic controls of the AODE. I suppose it could be a soleniod.
The converter shouldnt "lock up" in reverse.
There are many transmissions that will fit your car, including the AOD and the C-4. You will have to change torque converters if you change to an AOD, and you will need a TV cable, and the c-4 will require crossmember modifications. Anything else you put in other than an AODE wont be a simple bolt in.
The AODE is a good tranny, you should just fix it.
Is it doing this all the time?
I suggest you take it to a tranny shop, or call someone familiar with AODE's. Try
www.baumannengineering.com
Also, you can pull the valve body yourself and inspect it for obviuos problems like sticking valves, broken wires on the solenoids, sticking manual valve body, proper tourqe on the install, proper installation, etc...
The valve body can be inspected and removed from the car without removing the transmission from the vehicle.
If your not comfortable with this, take it to somebody ASAP, before you do more damage.