I switched to Dexron III several years ago. What a difference! Shifts up and down much smoother. I didn't contact an Allison dealer, I contacted Allison directly and talked with an engineer in their Technical Support Dept. I had a difficult time getting to one of their engineers since they are only supposed to talk to Allison dealers and not directly to customers, but they finally relented. He told me several things:
1. The Allison transmission in the M35A3 was specifically designed to be used with Dexron III. The military switched to motor oil to eliminate the need to support an additional fluid.
2. Dexron III is the only transmission fluid that should be used in the A3 transmission. Other Dexron fluids with a higher number are not compatible with the O-rings in the A3 transmission and will result in transmission failure.
3. The engineer suggested that a minimum of 5 drain and fills be made, driving several miles between, to switch to Dexron III from motor oil. Motor oil and Dexron III are not compatible.
4. Make absolutely certain that the transmission is not over-filled. Overfilling will result in the creation of foam, which will result in low fluid pressure and slipping clutches.
5. He also told me that Dexron III was de-certified by General Motors years ago. You can now only buy Dexron III compatible fluid. He recommended Valvoline Dexron III fluid, but told me to buy bulk NAPA Dexron III in 5-gallon pails instead of Valvoline since it was identical to Valvoline, being made by Valvoline for NAPA and was much less expensive.