Jeff's 727 rebuild thread
"Feels sluggish in third" implies to me tbat something is dragging. There is no reason that the car should feel any different in third than it did before the rebuild.
Both bands are released in third (direct drive). If one or both were adjusted too tight it could cause an issue.
They should be adjusted to different specs, you need an inch pound torque wrench to do them properly and should be turning the internals of the trans on the initial adjustment tightening in order to allow them to find their home.