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There have been a series of bulletins addressing the transmission flare issue, first to replace the valve body, then to replace the transmission, then to reprogram the transmission if it was still flaring. There are likely additional fixes to come. The flare is not caused by a single flaw or event. The parts were manufactured at various plants under various quality control conditions. For some transmissions the valve body was in fact defective and the replacement solved the problem. For others there were various other issues with the transmission and torque converter and replacing these in many cases solved issues perhaps related to quality control. Perhaps as you referenced the fluid level was not correct, and fluid level could create the problem. Finally you are left with transmissions which are in good mechanical condition but don't shift just right, and since that is controlled by computer, changing the shift points and logic in the firmware seems to be fixing many of these as well. I don't like being the test driver for solving Toyota's problems but at this point my car is running and shifting just fine.
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2007 V6 Camry LE, Built TMMK 27 September 06
"People who think they know it all are particularly irritating to those of us who do."
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