I got this from thirdgen it list some of the upgrades that started in 87. that 700r4hd would not hold up as well as a 87+
Q: Can I replace my 700R4 automatic tranny with a later model?
A: Yes. In fact, if your car was built prior to the 1987 model year, it's probably a good idea (if you have the cash). In 1987 (and even on some of the very-late-1986 cars), a number of improvements were made to the 700R4, the most prominent of which was a change to the auxiliary valve body with the main body and stronger components. This valve body is a section added in conjunction with the full valve body that routes the fluid differently. Earlier versions simply have a cover plate in place of this valve body where a small amount of fluid reserve is kept for some operation. The newer model has an accumulator to regulate the engagement of the forward clutch so that the shift into "D" would be smoother. An abuse valve was added which, based on throttle position, would short circuit the accumulator and cause the "D" shift to occur faster (benefits apparent when rocking a car that's stuck in snow or sand as it causes the clutch to engage faster to eliminate slippage and heat built-up). These two items were also made applicable to the engagement of the reverse clutch, thus smoothing its operation except during "abusive" conditions.
The auxiliary valve body is on the drivers side, just behind the trans valve body (opposite the accumulator housing). Four bolts hold the a 6 x 2 inch block in place with a tube a tube connecting it to the front-side of the main valve body. You can tell if you've got the auxiliary valve body without pulling the pan. The later tranny has a slightly deeper pan to accommodate the auxiliary valve body. To make certain identification, GM changed the pattern of markings on the pan bottom where the magnet is located. These markings are visible from the underside, near a rearward corner, forming a square shape of size 1.75 inches or so. The later pans (accommodating the auxiliary valve body) have unequal length lines (one set is longer than the rest) unlike the earlier pans which have all lines equal length. Also, behind the torque converter, look for a casting number on the front pump. If the last three digits are "732", then you have the new, improved version of the 700-R4.
The newer trannies also have a 10-vane pump instead of the old 7-vane pump (more pressure results in quicker, firmer shifts and tranny longevity).
If do want to upgrade, you should check that the input and output shafts will function with your existing converter and driveshaft. One of the other upgrades for 1987 was the change of the input shaft from a 27 spline to a 30 spline. But keep in mind that there have been subsequent changes after 1987 as well. Your best bet is to use the most recent model you can find.
But, also remember that if you want the shift points to remain the same as before, you should try to get one from a similar auto and engine since the valve body springs and the governor are sometimes different for different auto and engine combinations. In some cases the differences are subtle and others not. The valve bodies on the early 700R4s are not interchangable with the later models, so you do not have the option of simply swapping valve bodies to get around this issue. Also, note that if the newer tranny has an electronically controlled shift, it can be overridden.
