It maybe to soon to say for sure, but we're pretty sure the problem is fixed!! Thank you so much for your help!
When I told him about the NSBU, he was fairly sure that it could be the culprit. He ended up taking a blow dryer to it and taking it for test drives afterwards. Initially he only had first gear, after the first drying, now he had second, then third, then OD. So he took it off and at 2 am, smashed it open hoping to see some corrosion LOL but there really wasn't any noticeable damage. So now that he needed a new NSBU he decided to get new output sensor since he was going for parts anyways. The Allison dealer here said that the three sensors on the transmission were all the same, and cheap $30 each, so he changed them all, put the new NSBU on, and it's driving like a dream now.
I told him he should go drive through some water to see if it's really fixed LOL He mentioned something about putting some sealer or something on the sensors at think to keep out the moisture.
You guys are great! Many thanks again!