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yes, it will move more fluid out and YES it can create problems.
The solution is to get extra fluid, drain and fill, bolt it up, run the car till warm, drain and fill, and repeat as many times as you like. Three should be sufficient to replace most of the fluid.
The other solution some people do is to remove one of the tranny oil cooler lines from the radiator, run the car, drain from this tube, and keep adding till the fluid runs clear. This way the fluid never gets too low. Too much potential for a mess up for me. I prefer the drain, fill, and repeat.
My 97 also has a one quart differential to drain and fill to while you are under there. Not sure if yours is seperate or connected. This does not have to be repeatedly drained, you will get all the fluid with one drain.
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1997 Avalon XLS (black, black leather, tinted windows), sold June 2009 with 183K on it, still looking and running great!
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