1989 E-350, 7.3 diesel stumbling on braking
 

Greetings!

I have a 1989 E-350, 7.3 diesel, AOD and a Banks turbo that I recently purchased and am getting to know better, which I call Ernie. Ernie has been developing a rough idle while in drive with the brakes applied. It becomes a stumble and near stall when braking to a stop from slow or high speeds (ie when down shifting). If I do attempt to reach a full stop, I have to apply extra brake pressure, as it feels though the engine is not uncoupling from the transmission. At this point the vehicle lurches forward until I reach a full stop, and the engine runs rough and at an irregular rhythm until I remove my foot from the brake. It runs very smoothly in park, neutral, and when manually driving in 1st and 2nd gears. I can drive in 1st or 2nd and come to a stop without any stumbling or risk of stalling. When I manually disable OD, the problem improves nearly to resolution when braking from full speed. The problem is worse when it warms up, after driving for several miles, and in hot weather. I recently replaced the fuel pump, which has improved the situation mildly, and has reduced the severity of the stumble, but it did not solve it. Acceleration from a stop is strong and shifting is solid.

Any thoughts on helping me troubleshoot the origin? Perhaps you have had this trouble before?

Thank you in advance for your suggestions!

-Joe