Yes, the E4OD has problems. I have a '97 Ford diesel and I have had the trans rebuilt twice. First time, it got hot 250+ on a trip and went out. Second time, their was an electrical issue that caused the problem. When the trans was rebuilt the first time, I had ALL the cheap aluminum parts changed out to steel. This is one of the issues Ford had with this tranny. Make sure you get the BIGGEST cooler you can and place it on the front of the radiator. Also, change your fluid and FILTER around 12k miles. Do not hunt in and out of 3rd and 4th gear. This can also create heat build up.
P.S. Had a Banks Trans Command and shift kit installed also.
Good luck;)