727 problems...need to help a friend asap.

This was from a member of another group I belong too. Can any of you offer any advice or insight as to what the heck is going on here? I've never heard of this happening before.
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From Kenneth tonight:

My tranny currently leaks a bunch of fluid. Like a cup a night sometimes. Saturday, I took it out for a spin and as I was leaving the driveway at an easy pace (really, under 2000rpm), the 2nd gear hit funny. I wasn't paying too much attention, but the tires barked and I was flung towards the windshield. Now, I'm used to the tranny slipping a bit until it is warmed up or topped off with fluid, but this was a first. Plus, I was daydreaming a bit and really wasn't sure what happened. Thinking it would clear up when warm, I pulled away, grandma like again, this time paying attention. When it shifted into 2nd, it felt like reverse - tires bark and car stops suddenly. Then it goes back into first. Being (sick &) tired, I put it in the garage and took a nap.

Thinking about it later, I'm still puzzled. No big surprise, as I'm not an auto expert. I wouldn't expect the tranny to be able to do this just because the fluid is low. And I certainly wouldn't want to be driving down the 405 and have it suddenly decide to do the reverse thing. Anybody have any ideas? If it is possible to have this happen just because the fluid is low, I'll top it off and cruise slowly and test it. If not, it's parked.
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Could this be low fluid? Or is this more likely damage from low fluid? In any instance, how should he proceed.

:?: :?: :?: :?: :?:
Thanks in advance guys. [/b]