A freind had his trans rebuilt and now has the same problem as before the rebuild. it runs till warm, then won't shift out of first.

Right after the rebuild, he had the same problem and took it back to the shop. They said they had it fixed, and it worked last night on the way to work, but this morning the same problem happened.

SO, any ideas? it gets up to temp and then loses all gears except 1st and reverse.

The car will be going back to the shop, they are a good reputable shop that has helped me out many times for free, but I am wondering if anyone here has any ideas :?

The early 4T60'* like that had a thermal switch in the trans rather than the later (94 and newer) 4T60'* that had an actual thermocouple that reported back to the PCM for limp mode.

In this case, it sounds like that thermal switch is closing way to 'cool' and forcing the trans into limp mode. It'* located in the valvebody and requires valvebody removal for access.