Is my transmission toast??

The Tranny is pretty basic, not that many parts inside. You could take it apart and see what it needs. Could be you install new clutches and are good to go,
If bearings are damaged and the shaft shows damage a new tranny might be the cheapest repair. You can't tell it comes apart.

If you go to the link below, look most of the way down the page and you'll see a guideline of sorts for removing the transmission and bellhousing from an older Ford for damper replacement. Your steps should be about the same

Speaking of damper replacement, it wouldn't hurt to replace yours while things are that far apart.

And being a Chevy in a 2005 ,you could skip the step about removing the starter since it bolts to the engine from below, not the bellhousing like the Ford does


link

1. From your description (and KENO's comments) it sounds like the tranny clutches are dying.
2. No harm in trying the Lucas magic juice. You don't have much to lose other than your hard-earned ca$h for the Lucas.
3. While you're out buying the Lucas, stop by the grocery store and pick up some Nutella. It will help you choke-down the toast.

JQ

Last year I took our 2005 196 over to get work done and winterized. It was leaking oil, which turned out to be (first they said) a pressure switch (then later) the oil pan rusting out. But that is a different story... There was also water in the trans fluid, so they replaced the oil cooler, and the fluid, and said any remaining water would cook off once we started running it.
Well, we ran it hard for about a week, then the transmission started slipping once it got hot, and "smoking" from the dipstick area.

We pumped out all the fluid and it was a nasty gray color (though did not smell burnt per se) Replaced with new fluid, and it ran OK but then started doing the same thing. Once hot it hesitates to go into forward until you give it more throttle. Changed out the fluid again, and it was dark red this time.

Questions: Seems like the forward clutch packs are shot, would you agree? This would require a rebuild, or more likely a swap in of a new PCM 80a (to replace the 40a) full unit?

Until then, can I get a little more use out of it (last week of camp!) by adding Lucas "stop slip" product, or a different additive that would help it thin out less at high heat? Is there any harm in trying if the transmission is shot anyway?

Thanks!