I have a 2000 Nissan Xterra with about 225,000 miles on it. About a month ago I started it in the morning (it was cold), put it in drive and it ran only in 3rd gear ("fail-safe mode"). I shut it off and after a few minutes re-started it, and the "O/D Off" light flashed on the dash for 5 seconds or so. I then shifted it into drive, and it shifted fine automatically through all gears. This same issue happened twice since that first time, and all three events have occurred in the morning when it was cold out. After shutting off each time and then restarting, the truck ran fine. I have read many blogs on this and haven't found a smoking gun. I believe that the transmission is fine, and am leaning toward an electrical problem (battery, TCM, other?). Any good input would be appreciated. Thanks.

Yeah, it reeks of an electrical issue. The cold morning relationship tends to go with corroded ground straps and/or battery terminals a lot for some reason.....and the flashing OD light tells you the problem is most likely associated with strap for the tranny.

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wow - that's one I haven't heard of. sorry