automatic tranny problem p1864

We recently bought a 2000 neon, automatic, with 222000 kms. on the speedo. the guy we bought it off said he had the tranny rebuilt, and should be a good car for our family. The first problem we encountered the next day was with the tranny. We started to notice that when it goes into reverse and only reverse, the idle would drop, and the car would be jerky backing up, like a hot spot in a cluch in a standard would feel like. but this only happened in reverse, D,2 and 1 worked normal. so i checked dipstick after a good highway drive and notived it could use have a litre of oil, i put in lucas auto trany stabilizer/conditioner. the problem persisted and is getting worse to were it is now affecting in DRIVE, but only up to about 1500 rpm. Also noticing slip during shift from 2-3 . So i search on what is the problem and did the key dance and got an code
P1864, (NOT P1684, wich is battery unhooked or something) P1864 says torque converter curcit from what i read on the net.
Ive only been searching online about this problem for a bit but from what i can tell, the first thing i should do is check the connection of the wires to the solenoid. next thing is take it to a garage because i suspect it to be internal like the solenoid or torc converter. and even if it is a simple flush and filter, id still appreciate some feed back, and if any one has had this problem before, i dont want to get screwed on a rebuild repair bill, or numerous visits to the mechanic, when a second hand tranny from the wreck might be my best bet. any feed back would be greatly appreciated thank you