Just tore down a race 727 out of a drag car that has been running 10.80 for 12 years and slowed to 10.90 this year. The front clutches were starting to burn. Rear clutches and both bands looked good but I was surprised to find all the bushings and thrust washers were blue like they got hot from lack of lube. Everything else looks ok other than the vent was blocked. Has anyone seen anything like this?

12 years? How many runs? Lot of trash in the pan? Fluid stink/discolored? What does the rear support look like where it supports the output shaft? Pump OK? What kind of oil?

Look like it has some runs on it. If the rest of it looks OK, I would clean it up, replace the stuff that is questionable, check and fix clearances and end plays - including the pump - and put it back together.

Man I’ve messed up a 727 in many ways, but not like that! I’d be checking the pump for sure and most likely replace it. What’s the cooler circuit consist of?

Bushings n thrust washers don't look like they have a lot of wear. A blocked vent causes excessive heat in the trans, probably helped discolor the brass. I've seen the same thing in Allison's I build with blocked vents.

looks like a blocked lube circuit to me. Does this have a rear roller bearing support? I've seen them where that bearing blocked the return from the cooler.
Doug

Possible broken pump drive lug.Trans may still function but with reduced oil pressure.

Most likely.

Please explain, I’m interested in how this is possible.

A few years ago I had a problem that looked similar to yours but not quite as bad. During the 2018 season I noticed my 2-3 shift was spongy feeling. I continued to race like this for a few more events before removing the trans and inspecting it. Upon removal the converter did not slide out easily but I had to tug on it a bit to free it. The internals, bushings, thrusts, high clutches were discolored such as yours but not as bad. The pump had one drive lug broken off on the small rotor and while inspecting the housing, the broken piece fell out of one of the passages. I cleaned and reassembled the pump using A&A heavy duty rotors, Cleaned the thrusts and bushings, installed new high clutches and steels. Ran it thru the whole 2019 season trouble free and shifting hard and strong. Removed and inspected it during the winter and everything looks perfect. I can only relay my own experience with the broken pump lug. Can't really say why the pressure was lower but I do believe the broken drive lug caused it.

Trans probably hd 500 to 800 runs on it, fluid changed every season, pan was clean with slight odor from slipping front clutches, stock rear support, pump rotors, lugs and converter bushing look fine. Endplay is 0.040 unloaded and 0.020 with weight on output shaft so the bushings aren't worn too much from the 0.015 when built. I'm hoping the plugs vent caused the bushing discoloration.

Have you checked the cooler and lines for flow/restriction? How about the return path at the rear entrance port thru the governor support. I can't think of a reason a blocked vent would do this. It could cause a leak. Did it leak? I'd keep investigating.
Doug