How's the fluid level?
04 Camry I4 has the Aisin U241E transmission. It's POS. Well, IMO all U-series are junk.
The main problem with U241E is a defect with fluid circuit design that at times can cause two gears to be engaged at the same time. There is no software fix for this. You just have to kinda "get used to it" if this is the cause for the clunk. There are other causes, including wear in the inner CV joint on acceleration.
But in general you should drop the pan and change the filter every 15-30K miles depending on severe-normal driving. Consider using Castrol Import Multi-Vehicle ATF, Valvoline MaxLife, or Walmart SuperTech Mercon-V that's suitable for Toyota T-IV (T-IV = dino Mobil-3309) or Mobil-1 ATF (new formulation suitable for T-IV, not the old formulation). (Basically read the label carefully. And remember cleanliness and fluid level accuracy are important.)
Usually varnish falling off and plugging stuff is reserved for 100K+ miles of neglected transmissions. I think Toyota think it's OK to leave it in there for the lifetime but later changeed to 60K miles for normal driving. HA HA HA 60K miles what a joke.
Unless you're on a 3-year lease then it's fine, who cares right?
Edit: However, with the miles I would consider using Valvoline MaxLife ATF. There's no guarantee, but in general when you suspect transmission problems checking fluid condition and level is the first thing, and then just change it out with new fluid and filter, wipe the metal sludge off the bottom of the pan. Consider another filter change in 15K miles.
See if this will improve things. However, if the clutch packs are worn out from the blocked filter, then maybe MaxLife will help give you a little more time.
ATF kit, ~$20 + shipping on rockauto:
2003 Camry I4 2.4L Auto Trans
Problem: Moderate "clunk" when I shift from Reverse to Drive. After braking around a corner the transmission seems to miss-shift a bit. There's a lag from when I press the gas to when the gear is engaged. This causes a slight "clunk" while driving.
A mechanic told me that my tranny fluid was much darker than it should be. He recommended a flush/fill and filter replacement.
QUESTION: I haven't flushed the tranny fluid since I bought it in 2005 at 32K miles. Should I mess with the fluid or leave it alone? If I mess with it will it just dislodge the crap and make everything worse?
Thanks in advance.