Transmission questions.

Hello everyone, im hoping someone can answer some questions for me? Id just purchased a 1990 mustang lx, the car is awsome but has alot of problems! From what i can tell i think the motor is a 302, and the trans is a c4. I really dont know much more than that. The person who sold it to me reasured me that everything was fine, which it wasnt! I believe he got it running long enough for someone to buy, well i bit and now i have to pay! Anyway, the work this person had done to it; i honostly dont think he knew what he was doing. Grr! So here's my problem: The trans had just lost Reverse and wont shift into 3rd gear, when it shifts into 2nd it slams very hard. For some reason it will also go back into first and then 2nd, and occasionaly feels like it goes into 3rd. Theres also a leak at the seam on the bottom of the bellhousing, it doesnt look like a seal was used at all, and some makeshift plate was used to cover what the motor doesnt. Anytime i want to move the car i have to put trans fluid in it. So my question is: is this transmission(c4)sufficiant enough for the motor? Im sure the trans is toast so itll have to be replaced, is there a better transmission i can use that will fit my motor AND the body of the car? If anyone has any info im more than happy to listen! I love the car and i want it fixed! Id hate to believe i blew money on a giant paper weight!  

a c-4 that is built with up grade parts can hold 450 hp all day long and its almost as light as a t-5 manual have it rebuilt and have the tech check if a shift kit was installed and if the vacuum modulator has vacuum or is screwed all the way in but without seeing the car and everything this would be the best i could say without putting my foot in my mouth  
we will all have our day in court (tickets suck)

Thanks for the respond, its greatly appriciated! As fare as right now ive had the trans pulled and there is another one being put in. From my understanding the old one did have the shift kit modifications. The old trans was taken apart and checked out to see what was the matter to begin with and i guess that it had been bad for some time. All the gears where pretty much stripped and mangled! My mechanic had said he couldnt even figure out how it was still running. So i hope with the new c4 im having put in wont give me any problems. Also considering you mentioned it, is a shift kit neccisary for a trans that doesnt have one?  

they are not nessasary but for a car that is being modified from stock shift kits improve the way the trans shifts and for a car with power additions will increase the life of the trans and the kick in the pants feeling just don't go crazy with the kit and put a full race one in and drive it on the street it will suck  
we will all have our day in court (tickets suck)