may be a bad temp sensor in the tranny...mine was doing the exact same thing...it would read 120 degrees and run at normal rpms, then the temp sensor would tell the computer it was -30 degrees and it would then jump the rpms up, trying to warm it up(thinking its cold)
1999 rcss/2002 5.3, Ls1 cam, Ls6 intake manifold, Ported TB, NelsonPerformance tune, CAI, MSD 8.5s, Sanderson shorties, Magnaflow X-pipe, Maganflow 2in2out muffler(no cats), FLT lvl4, Yank 3600, B&M tranny cooler, e-fans, 2/3 drop, Truetrac, Trickflow cover, 3.42 gears, Caltracs, A.R. Irocs 18"x8", NS-2s(245/40/18), Nitto 555s(275/45/18) two JL 10s, 2" cowl hood, SS mirrors, SS bumper cover, step shavers, and Alot from Current Performance