Engine or gearbox problem?

I have a C3 that I have manage to get back on the road for a few months now and it has a bit of a fault before it warms

It's a 2003 model with a TU3 KFV (single cam) 1.4I engine (140000Km on the clock) and an AL4 auto gearbox.

When I first got it back on the road, occasionally (when not warmed up), the car would surge and have bad gear changes. Then the gearbox would go into limp mode (locked in third). It never had a problem once warmed up.

So I changed the modulator valves in the gearbox and it has not gone into limp mode since...however...the surging when cold still continues but no bad gear changes. It's not bad but it is noticeable. It's something, I believe, the car shouldn't be doing.

The surging and gearbox failure were one and the same...I thought... but I am now beginning to think they are not related but that one precipitated (caused) the other.

The only clue I have is that the surging stops the moment I get an indication on the temperature gauge and the engine goes into closed loop mode. The car runs perfectly after that.

My theory is that the modulator valves (or valve) were on their way out but were just operating on the edge of serviceability. When the engine surged, the valve could not compensate for the hydraulic pressure changes and caused bad gear changes, the gearbox saw this as a fault and went into limp mode.

Now, I know the AL4 gearbox is EXTREMELY finicky about hydraulic pressure and why the oil, oil level, oil temperature and modulator valves are so important to it's operation BUT I cant see how all of this goes away once the engine warms up. Having said that though, I know the engine ECU and gearbox ECU "talk" to each other about engine loads, gear changes and ETC. It's possible that the engine tells the gearbox it's now in closed loop mode and the gearbox goes into a different mode? I have no idea.

On the surface it seems to be an engine problem but I cant think of any engine component that would only effect engine performance in open loop mode but not effect it in closed loop mode.

Is it a gearbox problem that co-incidentally goes away when the gearbox reaches the same temperature as engine going into closed loop mode?

Do I have an engine problem or still have a gearbox problem?

I have not put the LEXIA on it yet but to be honest, I don't know what to look at. What should I be looking for in the engine area, what should I be looking for in the gearbox area?

Any ideas?

For anyone who might be interested I have a post script to this...er...post.

I sold the car a few weeks ago but forgot about this post. No, not what you are thinking, the car was running very well and the buyer is thrilled with it. So what happened?

I can not tell you how many kilometres I ultimately did in the car from when I got it registered, "back on the road" and then sold it but it wasn't a lot, maybe 2000-2500Km. So for about 500+ of those kilometres the car farted around and the above went on and I finally changed the modulator valves. Initially changing the valves only stopped it going into limp mode but the surging and dodgy gear changed still persisted. Well as it transpired over the next 1500 or so kilometres the car came good. The process was slow but in the end it's performance was not too bad. At least as good is I would have expected given the age of the car and the bad rap given to the AL4 gearbox.
So what happened? I believe the guff in the "glossy brochure" about the gearbox "learning" is true. Who'd-a-thunk it? I believe that while the valves (or valve) were unserviceable the gearbox ECU did its best to tune the gearbox but just failed. Once the valves were back in a serviceable condition the gearbox ECU went on with the job of tuning the gearbox again. As I said it took about 1500Km but in the end the gearbox ECU slowly sorted things out.
So if the same happens to you and you get the valves replaced, just give it time to sort things out.

Sorry to the moderators about this post turning out to being a gearbox problem and not an engine problem but I believe that the gearbox ECU was giving the engine ECU duff gen and the engine performance suffered for it.