Cryin' Lines
They are called "quick-connect lines" in the manual. We call them "quick-leak lines." We are talking about the cooler lines that run from the AW4 to the cooler built into the radiator. Sure, they go on and off easily, but they always seem to be leaking from somewhere or another.
Prevention:
Try praying or joining a cult. We've tried perpetual finger-crossing and transmission stops-leak and neither works. Face it, they are going to leak.
Cure: The "approved" way to do it is to buy and install new lines, but at a cost of about $90 for lines that we know are going to leak, we take a different route. We use rubber hose rated for ATF and cut the line with a tubing cutter, flare it a little bit, and put the rubber hose on with two hose-clamps per end. Pretty? No. Effective and inexpensive? Yes. We aren't even sure that the two clamps are needed, but what's an extra five cents of insurance hurt?
Hothead
The specified operating temperature for the AW4 automatic transmission is between 125 and 176 degrees. Without an auxiliary transmission cooler, ours can run from 160 degrees up to 260 degrees. The killer of all automatics is heat, and at about 240-degrees important additives cook off. Maybe when it rolled off the line it was OK, but with added weight of armor, skidplates that guard against rocks and prevent cooling airflow, and age, they run hotter.
Prevention: Live in Canada or Alaska. Or install a temperature gauge and keep an eye on it. Using low range when wheeling can help keep temps down. Kicking it out of overdrive for long grades and when towing or hauling heavy loads can keep it down as well.
Cure: Install an auxiliary transmission cooler. They can be as cheap as $30. We like the B&M Supercoolers. They are durable, compact and tuck up under the radiator or under the Jeep behind the driver's side of the T-case very well. If you put the cooler up front it is a great time to fix the leaky lines too.
C-101
For once, we aren't talking about Trasborg's pile of Jeepsters. We've hit on this one before in these pages, but it is worth covering again. The '87, '88, and some of the '89 model years had this wonderful connector, called the C-101 connector. It connected all the wiring from the inside of the Jeep to the wiring outside of the Jeep. The problem is, it is over 20 years old and is mounted right at the top of the firewall where all the water cascading off of a newly-opened hood can go. If all that wasn't enough to prove a point, there is a TSB from Jeep way back in '89 that provided a crankshaft sensor bypass kit and instructions to get around the C-101 connector and keep the Jeep running. Most of the '89 models, and all of the '90 models didn't even have the C-101, they just went to a rubber grommet passing the wires through the firewall.
Prevention: You can build a rain shield for it, or just be aware of it when you open the hood. Periodic disassembly, cleaning, dielectric-greasing, and reassembly also help the issues.
Cure: Get rid of it. Solder all the wires from the inside of the Jeep to the corresponding wires from the outside of the Jeep and heatshrink it. All the issues will be gone forever. The risk is if you cross wires just once you can fry stuff pretty easily.