Alright.. at my wits end with this truck! Got it from a friend who was going to send it to scrap for $100. Engine is strong but it had some issues. The least of which was a leaky transmission pan. I managed to baby it the 250 mile drive home without much issue aside from the warped rotors and bald tires. Four days later I topped the fluid off and attempted to run it to the DMV to transfer the title (it's out of state and they have to have it there to check the VIN). It drove there just fine but upon leaving, the engine stalled when I'd shift it into reverse. I eventually got it out of the parking space and made it back home.

Three days later I removed the pan, replaced the gasket and the filter. Well, went to fire it up and had the exact same issue. The engine would immediately stall once it was put into reverse. I allowed the truck to idle in neutral for 15 minutes before re-checking the fluid, which was fine.
Thinking maybe it's a fuel issue, I removed and cleaned the throttle body, replaced the IAC and the TPS. Changed out the plugs, wires, coil and rotor. Charged the battery, cleaned the posts and replaced the clamps.
Truck fired up like a champ! Went right into reverse without a hitch and managed to make it 5 miles down the road before it started stalling again. So, I baby it back home..while it's doing it's best to stall out every time I had to slow down or stop I am trying my damndest to keep it running. As long as I feather the gas while slowing the engine stays running.
Now, the best part !
It felt like something was rubbing on the drivers side rear wheel, so, I put it back up on stands, remove the wheels and check the rear brakes..which are perfectly fine! Put the tires back on...and while it's still up in the air I fired up the engine. It shifts into reverse and doesn't stall. Same is true when it's put into drive but the rear right rotates 3 times faster than the rear left...its an open differential...
My question is, if the torque converter is locking out, then why does the engine not stall out when the vehicle is off the ground? Keep in mind I had my foot on the brake when I shifted it into reverse both on the ground and off the ground, so the wheels weren't moving initially.

 

I doubt it is the trans yet. Check things like fuel pressure, if it isn't enough you wont have enough to support the engine running, it is not under load in park or neutral but it is while in gear.... under load means needs more fuel. and yeah when running in gear while jacked up, if you have an open diff its common for one wheel to spin like mad....

 

well, the issue with the left rear wheel binding up has been identified... the bearing was bad. So, that has been taken care of as of 5 minutes ago.
When the trucks rear end is jacked up, and the brake is applied , it starts and moves through the gears without stalling. The drive shaft isn't spinning, so it should be exactly the same as it being on the ground, torsional strain wise.. right?
As soon as it's on level ground, it dies the moment you put it into reverse. Almost like a manual would if you let the clutch out except it doesn't lurch.
As far as I can tell the fuel pressure is fine.. and the engine isn't idling funny or sputtering like it would if there was a vacuum leak. RPM's stay aroind 1100 at idle and then drop to nothing once its in gear. If I get it going forward it will run like a champ and it seems to move smoothly through all the gears when accelerating/decelerating.... feathering the gas while holding the brake will keep it running but I hate to keep doing that.

 

how did you determine the bearing was bad? It's common if you have an open rear for one wheel to spin free and the other not to while hanging in the air.... in this case they are pretty close to equal but some vehicles have a longer axle on one side, which will be the most likely one to spin while the other one sits... could be one brake is adjusted slightly tighter than the other, not that it is necessarily "bad", but I remember at work, when someone would come in with a noise complaint that I would have to take a chunk of 2X4 and rub it against the spinning wheel while I have the car in the air so I can stop one wheel and make the other side spin to narrow down the source of the complaint.... FWD cars are the same way (only opposite end of the car of course)

 

You could hear it "whining" when driving. It wasn't just moving a little slower on the left, it was binding up. We originally thought it was the brake sticking but after process of elimination and removing the axle, it was obvious there was a bad bearing.

 

hopefully it didn't gouge a groove in the axle itself.....

 

Unfortunately, it did. The carrier bearing on that side is also gouged pretty significantly.

 

so then did you replace the axle shaft? or at least put in an "axle saver" bearing? (these are 1 pc with the seal and bearing in one and shifts the bearing surface to an unworn spot on the axle.) If not then the repair will not last, it will leak very soon. The carrier bearing will not wear on the axle, it rides on the carrier itself, the axle slides within the carrier, and splines into the side gears within the carrier.

 

Used repair bearings and replaced them. I may be mistaken about the carrier bearing (as for what it's called) . It's on the inside of the rear differential? There is one on the left and the right. The one on the left had chunks taken out of it too, which was making it impossible for us to get the left axle back into place because we couldn't get the damned thing to turn.

in any case, that issue has at very least been solved. There is no more binding and no more noise. I Still have the issue with it stalling in Reverse. I still find it odd that the truck will not stall the moment you shift into reverse as long as the *** end is in the air. Again, my foot is on the brake when it's in the air and the driveline does not spin, so... how is this different than when it's on flat ground?