It has always been suggested
that you don't tow with it in overdrive. I never noticed that the gas mileage changes that much with out it. Does it ever go off for periods of time or have you noticed the tach is a little higher? This light will flash if the torque converter clutch fails to engage or if you loose overdrive. The computer knows how fast the engine is going and how fast the output shaft is going. If the speeds don't jive with what it expexts, it flashes the light. Unless you hear new noises or have really erratic operation, you can live with it for a while. I stripped my overdrive drum teeth and drove it another 70K. Another time I lost the overdrive and 5K later dropped the pan and found 5 needle bearings. It still drove fine except for overdrive. You can drive for years without the torque converter locking up. These transmissions are tougher than you think!
To check torque converter lockup, drive 60 at a constant speed. When stable, check your tach value. Keeping your foot on the gas, with your left foot lightly touch the brakes. Only enough to turn the brake lights on. You should see the tach increase about 300-400 rpm. If it doesn't increase the torque converter wasn't in a locked position. Often this is a stuck valve in the valve body and not a hard failure.