Yup definatly the seals getting old and hard. time for a rebuild, more than likely its the apply piston seal going bad if it isnt going into gear until its warmed up. you could get a reseal kit for pretty cheap but putting it in is a different story, unless you have some experience with tranny's and the spring compresser to compress the spring on the apply pistons i would try to get someone who has done it before to do it. or show you what you need to do. While your doing it i would put a new set of frictions and steels in it too and a band or bands whichever, while your at it.