I think my 727 is fried. Now I'm at a crossroads...

I installed the deep pan yesterday and took another look at the cooler line. It wasn't quite as sharply kinked as I originally thought -- in fact it wasn't kinked at all -- just a sharper bend than previously. I was careful to not overfill the fluid and took her for a test drive. Drove fine, shifted fine, no leaks after about 25 minutes of city driving.

An overheated or failing converter will cause puking of fluid out of the vent. Plugged oil cooler or kinked lines are the usual culprits. A sticking converter control valve in the valve body is always on my list. I've run across a few that didn't have the baffle plate installed over the inside of the vent hole too. Blowing fluid out of the vent commonly takes place sitting in a traffic jam in drive, or when pulling up a long grade at low speeds.
Failed front seals and cracked converters leak all of the time, and never heal up, so your problem isn't likely either of those. Too much fluid, contaminated fluid, or poor quality fluid should always be looked into. If I were you I'd repair the kinked cooler line, blow out the fluid cooler/heater in the bottom of the radiator first. If the converter has a plug I'd drain it and the pan and refill with top quality ATF+4. If the converter doesn't have a drain plug I'd drill and tap it for a 1/8 pipe plug. It's a drippy job but it doesn't take long and all the metal chips you make will be flushed out while you are doing the job. Worst case you have a worn out pump housing, reaction shaft, and/or pump rotors. If the pump isn't good enough to keep up at idle speed the converter will drain back some which raises the fluid level in the pan high enough to get whipped up by the rotating parts once you get moving again. Foamy fluid will make it slip and leak from the vent. Happy hunting!

Steve
Thanks for all that info. With what you've said in mind, I feel like I'd like to pull it out and rebuild it. It's not hard and I would have peace of mind knowing I freshened it up. Although, the valve body does intimidate me...

The car sat for 20 years before I bought it, and I have no idea how the previous owner cared for it.

You mentioned ATF+4? I'm guessing you prefer that over Type F? I've read of folks using Type F to help with firmer shifts, so I've been using that for a couple years. What are your thoughts?