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Advice on what to do first, and trans tips...
Hey congrats on the 63 Olds 98! Yes, these cars are quirky in certain areas but if yr good to it it'll be good to you. The guys are right about the slim jim transmission, they aren't the greatest units but here's a tip. Usually they hold up if you aren't rough with the throttle. If you are going to jerk the car around and do neutral drops, plan on the fun lasting only 5 minutes until the trans grenades itself internally. But if you drive normally, these units can last over 200,000 miles (friend's father had a 61 that made it to 280,000 or so). Here's the key: the internal parts are weak, so if you dont shock the unit with sudden changes in throttle, you'll be fine. You can do full throtlle accelleration, but just dont mash the pedal...go gradual. And here's the number one thing...if you are driving along and stopping for a red light, for example...you are slowing down and you are just about stopped and then the light turns green again. If the trans has shifted down out of second back to first, there is a LAG time for the coupling (akin to the torque converter) to build pressure again before first gear will be there. So you may be in 'neutral' for a few seconds. So dont suddenly hit the gas and expect to go - the car may revv and slam into gear. THATS how most of these units blow up! So just remember, go easy and you'll be fine.
As far as changing the trans? You might be able to do that, but if you do you will severely devalue the car. Do it and you will kiss your investment good-bye.
Your best bet is to keep it stock, get the AC working, and just cruise.
If you are handy, do a full tune up to factory spec after you finish the brakes. You'll be amazed at the power and torque these cars have. They are a blast to drive.
But the first thing I would do is pour in one quart of Mobil 1 5W-30 on top of the old dirty engine oil, and one quart of engine flush (such as Kano Kreen) and let the engine idle on fast idle cam for about a half hour and then change the oil and filter. The 394 is a great engine but it tended to get sludgy if not maintained, especially in the upper cyl head by the rocker arms. So oil changes are critical and this method is a good way to do an agressive flush while reducing the danger of damaging the engine. (The Mobil 1 has a very high film strength to counteract the thinning action of the engine flush). If the car has the stock original oil pan drain plug, dont panic, it looks like it will require a special tool, but just stick a 1/2 drive ratchet into it without a socket and you'll get it open.
As far as fuel, most guys dont know that today's premium fuels are the same octane as they were years ago when these cars were new. Seems that everyone was duped by the change in the rating system. Today it's r+m/2, so it's an average of two systems. Bottom line is that at factory spec on ignition timing you'll need premium, but the car will run fine and not 'ping' under most conditions. If it is troublesome I can help - there are many many ways to eliminate the ping without sacrificing power or fuel economy that dont require modifications or expensive changes. It just takes a little smarts and knowledge of engines.
Let me know if I can help...I am a relatively young guy but I know my stuff, especially on the 61-64 Oldsmobiles.
Alan
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