1995 Lincoln Continental PCM

I am trying to repair my girlfriends Lincoln, started out as a exhaust issue, someone cut out the catalytic converter, I repaired the exhaust by replacing the converter with a "test pipe". The car ran very poorly, I replaced the very worn spark plugs and wires, as 2 wires broke while changing plugs. Car ran much better!
Nearing the end of a trip to town ( about 200 miles) the car started dieing, battery was going dead, I checked the alternator output at the battery and was getting only 9.8 volts at that time, the next day I replaced the alternator.
the one constant through all of this has been the fact that the car lurches while in gear and at most speeds, and has no particular rythme, at first I thought it was an engine issue, but now seems as thoughit may be a tranny issue. When cruising at 55 mph and in drive( not overdrive ) the rpm's kick up to about 3500 from 2100 but the car does not accelerate, as if trans goes to nuetral or second gear is slipping.
When sitting at a stoplight in gear there is a rythmic clunking noise coming from the front end, the noise is also noticable under hard acceleration, if I slip the trans into nuetral at a stoplight (while in gear) the clunking noise goes away.
The questions that I ask myself are (1) does the PCM or equivelent, control the shifting patterns of the tranny? (2) could the PCM be locking or attemting to lock up the torque converter (3) is the tranny going out (the tranny seems to shift ok when started out in the OD position).
the post catalytic converter o2 censor is currently nonfunctioning, the car has 235000 miles on it. It is in decent condition otherwise, but has reached the point where it is questionable wheather it is worth any more investment.