Diagnosing Taurus Transmission Fluid Eruption

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Wrong transmission, but thanks anyways
I would still check both of those, both transmissions have those items, the main difference between the AX4N and AX4S is that the AX4N can skip gears and the S has to go through each gear.
 
The vehicle in question is a 1995 Ford Taurus w/ 3.0L engine and AX4S/OD transmission, and it has 79K miles on it. It has been a grocery-getter for my aunt the last couple of years until the other day when it vomited all its transmission fluid during a highway trip. She limped it into the next town with smoke billowing out from the hood and barely able to move forward under its own power.

I showed up on scene and could see a puddle of trans fluid on the ground under the car, but the car still started and idled backward and forward when put into gear, so I grabbed a tow strap and pulled it to a buddy's shop where it sits now, waiting on me to decide what will become of it (gave aunt my other Charger, so she will no longer be driving this Taurus).

My first thought was to replace the transmission with a used one from a salvage yard and try to sell the car, but the prospect of spending several hundred dollars on a used transmission and then swapping it out just to get the car to a point where I can sell it for some meager amount doesn't sound appealing. So I have pretty much ruled out that approach.

Another option would be to sell the car for scrap and be done with it. The ease of that option is certainly appealing, but the relatively small amount of return gives me pause. I'm guessing I would get $200 or so for it, which is barely enough to cover the expense of me driving down there to do all this.

The remaining option seems to be try to figure out what happened to cause the trans to upchuck its fluid, fix/repair that, fill it up with fluid and hope it drives well enough to sell off as-is.

In pursuit of that goal, and keeping in mind I'm not a Ford expert, I have some questions I hope to find answers for here:

1) is there an inherent flaw or weak part on the AX4S transmission that leads to it puking up its fluid for any reason? If so, could a used replacement be hardened to prevent a recurrence on that unit?
(The dipstick was still in place, and without blowing that thing out to expel the fluid, I am at a loss to explain how the fluid got outside the transmission in the first place.)

2) what kind of ATF do those transmissions need to work properly?
(I've seen Type III/H and Mercon listed as the spec'd fluids, as well as multi-vehicle types like Maxlife and others. Any clarification is welcome.)

3) How difficult of a job would replacing the transmission be for someone who knows their way around a car fairly well but will be limited to hand tools and jack stands for such a task?
(if it comes down to it, I guess I can replace the trans with another one, but I really do not want to if I can avoid it at all costs.)
I had the same tranny in the same year Taurus, I towed a boat, probably not the best idea. I trashed several trannies, Thankfully, someone rear-ended it while sitting parked in front of my house. Their insurance paid well to total it.
 
Sixteen years ago? Driving on I-26 near Orangeburg SC, noticed smoke in my rear view mirror. Stopped car and looked underneath. Trans fluid dripping on hot tail pipe causing smoke. Drove to Ford dealer. Put on lift. Tech looked and knew immediately what the problem was. There is a small donut a few inches in diameter that seals the transmission to the torque converter (or the torque converter to something - can’t remember as it was a long time ago). This donut was leaking. Fluid leaking past the donut. Flat Rate is Ten Hours. Tech said that it was not uncommon that this donut would leak. Used special tool to hold engine in place while he dropped the transmission. Removed old donut and installed new donut.

Below prices were 2005 prices in Orangeburg SC
$5.00 for part.
$700.00 (10 hours flat rate at $70 an hour.

Note, this is FWD car. Dealer had donut part in stock and tech knew what he was doing. Had no problems once fixed.
 
Since the car was driven ~60 miles 6 qts low on trans fluid, I didn’t like the chances of the trans being okay and just needing an external part replacement to bring back the missing gears. So I sold the car for $250 and spent the money on a set of tires for The Bacon Hauler.
 
My son had a 98 Taurus that puked out fluid from the front of the tranny on a long trip (80mph + across SD and WY). Tech thought the front seal of the tranny was blown. We let it cool down overnight. Added some Lucas leak stop and filled it up. Never had another problem. I know there is a vent problem with these trannys, but I'm not sure that was the case here either. His shifted fine after though.
 
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