My ford ranger is shifting hard into 2nd gear and the od light flashes and i lose alot of engine power, what is causing this?

It's a automatic 2000 ford ranger 3.0L 2wd with only 130k km,
Symptoms: going into 2nd gear it shifts very hard and usually reaches very high rpms before shifting, (i've been letting off the gas to help it shift easier)
When it does shift hard it usually triggers my overdrive light to flash and my overdrive stops working, the transmission fluid smells slightly burnt but is still fairly clean. Also if i step on the gas on the highway to pass someone i've had the rpms redline suddenly and lose alot of engine power. Anyone know what causes this?

Have you checked the fluid? Drive it around for an hour and check it.
I believe the maintenance schedule recommends a trans fluid change around 100,000k.miles

Your transmission is screwed up. Find an ATRA certified shop if you can. Read the fiirst paragraph on the page.

You should also join an ownwers forum.

Sounds like you'e going to need a rebuilt tranny.