tranny slipping into n Options

[Malhar95]

Posting this for a buddy:
It's a 7a auto 1994 (corolla though)

The tranny keeps slipping into n after driving it,
It did before 2 weeks ago, checked the fluid it was low, then after a qt it showed too much but when we pulled the drained plug it pulled only a qt out (so dip stick might be bad) then it was normal driving fine

Today the car went into neutral suddenly, fluid shows fine.
Should we drain and put new oil in since dip stock can't be trusted or could it be something else?

I remember similar thing happened to my celi but it was something to do with shift cables..

[Malhar95]

After leaving the car for 2 days, today before towingit we tried one more time,
The car drives fine until it warms up, then starts reacting, drove it to a transition shop, had to shut the car off for few seconds to let it cool down, the longer we let it cool the more ot ran. I also think it's the fluid but after we drained all the fluid, I put in what the corolla forums said 4 qts so I don't think we over filled it, maybe it didn't drain completely?