1996 Chrysler LHS itermittant down shift with transmission

Defaulting to second gear is "limp mode" which allows you to drive slowly to a repair shop without needing a tow truck. You already know that you get it out of limp mode by turning off the ignition switch and restarting the engine. When this occurs, it is in response to the Transmission Computer detecting a problem. In this case it is most likely to be related to one of the speed sensors, but to know for sure, the place to start is always by having the diagnostic fault code(s) read. Fault codes never say to replace a part or that one is bad. They will indicate the circuit that needs further diagnosis or the unacceptable operating condition.

Thanks I have some experience at working on vehicles in a dealership environment and a few shops over the years. I was thinking the same thing earlier today about the speed sensor causing the problem but needed an opinion from someone who has more experience with this type of issue. I will pull the codes and see if suspicions are correct and go from there . My own vehicle and don't want to replace parts blindly without understanding why its happening. Always learning something different. Thanks Again

. pulled codes low speed fan circuit, multiple cylinder misfire detected, and cylinder 5 misfire detected 3 codes in all but nothing pertaining to transmission trouble unless I need a different setup to pull codes for transmission.

Yup. You're in the Engine Computer. You need a scanner that can access the Transmission Computer. It is usually referred to as the "EATX". Electronic automatic transmission controller.