I've got a used 904 behind my 318.
I got the trans several years ago, it was pulled from running 74 Dart. And that's all I know about its history.
When I got it, I put in new front, rear, and selector shaft seals, a new pan gasket and filter, and filled her up with fresh fluid.

It's been working fine until a couple weeks ago. Seems to shift fine when its cold, but after it warms up good it starts acting weird. Like very delayed 2-3 shift. Its like driving around town, taking off from a light, it will shift perfectly fine one time, and the next time I will get the delayed 2-3 shift. And a couple times is has shifted down abruptly from 3-2 when decelerating.

Checked the fluid when I got home today, fluid is so clean you can hardly see it on the dipstick. But checked it 3 times to make sure. Checked when hot, idling in Park, it looks like the fluid is about 1" above the full mark.
Will too much fluid in the trans make it shift funny or do I have something more serious going on?

Its been working fine for the last 2-3 years.

Overfull can cause problems, correct the fluid level and report back if it still shifts weird.

I missed the "checked in Park" part, so the fluid level is probably OK.

Un-commanded downshifts at speed accompanied by delayed upshifts are usually caused by worn governor sealing rings.

Put it on ramps this morning and drained about 1/2 quart out of it. Lucky me, when I first put this trans in, I put a drain plug in the pan. So it was really easy to pull the plug and drain a little out.

So after that I took it out for a ride again today. It pretty much did the same thing as yesterday. Shifts fine when its cold, but after it gets hot then it wont shift correctly. Today it wouldn't shift to 3rd unless I ran the car up to about 55mph and let off, then it would shift. So all the errands I ran around town today I was basically stuck with 1st and 2nd.
Weird thing every time I parked the car for 10-20 minutes to shop or eat lunch, It would shift fine 1-2-3 for the first few stops, and then after warming up a little it would start with the delayed 2-3 shift, and the abrupt downshift from 3-2 if I managed to get it to 3rd.
I also tried backing off my kickdown linkage a bit, just to see if it wasn't shifting because it was set incorrectly. This had no effect, tranny still acted the same.

The governor is in the extension housing (tail shaft) Not sure where the seals are.

Leakage at the governor sealing rings will be more pronounced when the fluid is warm, explains why it shifts better cold.

Gaining access to the rings requires removing the tailhousing, removing the tailshaft ball bearing (really HD snap ring pliers needed), the governor support snap ring and the governor cross shaft. The governor support is then removed from the output shaft to change the rings.