Hello everyone, could really use some help.

Recently purchased a 2001 Camry LE with about 180K on the clock. It has suddenly developed and intermittent transmission problem that really has me stumped.
When it decides to go rogue here is what is happening:
Shift into R or D and it engages, feels normal, slight rpm drop. Apply throttle and the engine revs then the transmission suddenly engages as if doing a neutral drop.
The level of RPMs needed to engage the transmission at these times varies. Sometimes there are loud noises that accompany the sudden engagement, sometimes not.
When engaged at low speeds you can feel the transmission fall into and out of gear at times.
When this is acting up and it is put into N, the car wont move, almost as if it is in P, but a little softer feel.

The first time this happened I noticed it was about 3/4 of a quart low on fluid so I topped it off and it helped for a short bit of time.

So far I have dropped the pan and replaced the fluid and filter. The fluid was very dirty and I found some metal shavings on the magnets.
But, I can put a couple hundred miles on it in between the episodes and everything is fine. Even drove it after the service and it worked normally for awhile.

Spoke with a mechanic friend and he suggested it may be an intermittent sticky valve, then recommended I use sticktion remover to help free it up.
Used it, seemed to work for about 80 miles then started acting up again.

I have the FSM, but this is not mentioned in any of the diagnostic sections that I could see. Applied my best google-fu and was defeated there as well.

Only codes showing up is P0420, which is another headache I am chasing..

Has anyone come across this?