Burnt Fluid in Transmission, what do i do?

[ye ol cherokee]

I have posted a thread about this a while back, and i am getting ready to do the deed, but i just wanted to talk to you guys quickly about some thoughts I've had.

Just as a recap of info: I have a 98 Cherokee 4.0 with the AW4 with approximately 130,000 miles on it. This vehicle is 100% stock and has never towed anything.

My fluid it burnt. Its completely brown on the dipstick and definitely smells burnt. The fluid is at the correct level, and the transmission operates FINE (from what i can tell)

Most of you guys told me to do the drain and fill method, just draining the pan, refilling those 4 quarts, and repeating every few hundred miles until it stays red

My concern is that while, obviously the transmission will fail at SOME point if i leave the burnt fluid in there, i'm afraid that the cleaning agents in the new fluid will clean out all the "crap" in the old fluid that the transmission got used to running on (by driving so long with burnt fluid etc.)

So with that in mind, do you guys advise doing the drain fill method still or just leave it in ? I know its like rolling the dice with this situation, but i am just trying to make the best decision here. Obviously maintaining a vehicle properly from the start is the right thing to do, but unfortunately i am stuck buying used vehicles.

Anyway, as a last note, what should i do? and what about the filter? should i wait to change it until i do a few cycles of the drain and fill ? And would you guys advise adding a bottle of Lubegard Red to the mix to help condition stuff (i dont know what it does, im a sucker, just heard some good things about it)

Also i bought 12 pack of DexIII/ Merc by Peak, any input on that?

[4.3LXJ]

Drain it and fill it. My son currently has a TJ with 357K and a tranny that did not work right. The fluid was beyond brown, it was black. We have done the drain and fill twice now and it works perfectly. When the oil gets "burnt" it destroys some of the additives. The oil lubricates, while the additives also make it sort of sticky. This is for the clutches to work properly. Get some new fluid some time and put a little on your finger and thumb and then press them together tightly and try to slide them. You will see what I mean

[yellow31]

If you crapped your pants, you'd change your underware the first opportunity you got. Change your fluid, there's no logic to keeping the old stuff in there.