I've seen people on here talk about being able to check a 727s health by using compressed at a low pressure, but how is that actually done? Are there any instructions on the net that I can follow?

Typically air checks are done while assembling a trans to make sure clutch packs & bands apply properly.. It can be useful on a used trans but it's gonna be messy... Also all the air checks are gonna do is confirm the clutch or band is capable of being applied, it won't tell you anything about the condition of the clutch or band linings... Unless you have enough experience that you believe you'll hear the difference in the piston travel with a tight clutch pack & a worn clutch pack..... Normally on a used trans it is used as a diagnostic tool to pinpoint a problem that might be in the valve body or a clutch/band application problem..

But you will hear leaking sealing rings and lip seals.
You can see if front and rear servos are appyling and if they need adjusting.
You do need the valve body down.