Do you know your current ratios? What does your glove box sticker say about your axles? (via RPO codes).
Ideal gear will depend on your wheel size. Your assumption of wrong gears is quite possible, if your rpm is about 2000 in 1:1 ratio and now in D it would be close to 1400 in OD, provided that your converter is locked. The old 3 speeds had no TCC so they probably spun the engine extra 200-300 rpm. Or if you are saying that you have 2000 rpm in 3rd gear with converter unlocked then the transmission will sure struggle in OD slipping a converter a lot.
I had an issue with transmission falling out of OD, but it was caused by low ATF - It seeped from gearbox to transfer case with no evident leak.
Speaking of 700R4 and swapped motors are you 1000% sure that TV cable geometry is correct? Geometry of that link is critical, it's not a kickdown cable, but controls everything, shift points, line pressure, kickdown, feel of transmission, you get it wrong and the transmission won't live too long. Worst case with TV cable disconnected it won't survive a test drive around the block. If your transmission wants to downshift early then the TV cable is possibly on a tight side. TV cable geometry would be the very 1st thing that I'd check. And don't loosen it more than a click or two after you are sure that the bracketry and cable stroke is correct.
Do you have a setup to lock the converter? AFAIR 700R4 does not like to be driven with the converter unlocked and no additional cooling.