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OD light /Shift problem 200

My wife is experiencing some transmissin problem with an 86 240 with auto
tranny.(AW-71) For the last month the dash light indicating the OD is off
has been coming on partially. ie faintly lit. Pressing the OD button on the
side of the shifter while driving brings the light on fully and the car will
shift out of OD properly. Yesterday while accelerating onto the freeway she
said it seemed the trany would not upshift to 3rd and the OD light was
glowing faintly. She had to click the OD button off/on to get the car to
shift. What likely problem(s) does this indicate?






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