"My thinking is the check valve for locking up the torque converter is letting enough fluid by that it allows the torque converter to slip slightly there for telling the computer to unlock. What do you all think? "
I think your thinking is likely flawed, the 'puter is looking at LOTS of things other than TCC slip, mainly engine loading.
By '98 they'd gone to a PWM TCC engage, which allows slippage as decided by the 'puter, and not an instant lockup.
They redesigned the convertor clutch for longevity with slipping.
I'd GUESS the "issue" you are seeing is more of a software issue than a "hard" failure in the transmission, not sure what all is out there for tuning a '98, but if possible, some changes could probably be made from that end.
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