Seems like something that is NOT applied in first, but in all other gears has too much play, or is loose. I can't remember whats applied in a 350 in which gear, but it could be a loose band, or a planetary gear set with too much play in one or more planet gear. does it do it in LOW1? Get a TH350 book and look at a flow chart. Find out what, if anything, is held in other gears, but not in first..Best thing i can tell you. You can rule out the speedo, u-joints, t-converter because all those would be affected in all gears.