Most everything you described sounds pretty normal for a diesel except the not downshifting. There are two valves in the governor that will mushroom, the inner spring loaded valve and the free weight on the other side.

I have fought this on my trans but mine ended up being the front servo hanging up on the 5.0 lever. I put mrrandyj's billet front servo and a 4.4 lever in and that has seemed to cure mine. It only did it when it was good and hot though. I need to wait until the temps reach back into the 90's here to be sure.