The 4l60E tranny is a decent tranny. However the trannies built for 96 and 97 did have issues with extremely harsh shifting. Felt like a shift kit on steroids when shifting from 1st to 2nd. The first time I felt it, I thought someone rear ended me. While I dont have a Tahoe, my 97 K1500 has the same engine/tranny combo. Apparently, the problem is caused by the TCC lock up solenoid that locks up the torque converter. The solenoid plunger will sometimes hang up due to an undersized orifice. When the computer sees this, it gets an error thats interpretted as a slip. Since the computer thinks the tranny is slipping, it tells the tranny to shift at full line pressure. The result is an extremely hard shift. This didn't happen all the time (in my case anyway). Just after extended periods of highway driving.
The fix for this is relatively easy and any decent tranny shop should know of it. The fix is basically replacing the TCC solenoid and enlarging the orifice. Or, you can replace the valve body. Or, you could do what I did for almost a year. Turn off the engine at a stop light. This resets the computer. When its restarted the error is cleared and its back to normal. Another thing to do to avoid the hard shift is to start off in second gear. Like I said, I did this for almost a year until I got it fixed. My truck has part time towing duties whenever I take my boat to the lake.
And yes, I had to replace the lower intake manifold gasket due to leaks.