Tranny Selection

I don't know what tranny I should go for.  I should have around 300hp with my new 350 setup.  I bought a TH350c with less than 1k miles and with a shift kit but someone urged me not to use it because "the torque converter clutches would blow up into the tranny and ruin the tranny if I didnt flip the toggle switch at the right time", don't know if thats true.  And I dont know how exactly to wire the switch.  Anyhow he has a good condition th400 sitting around he would sell me for $300 but I read somewhere that the Th400 can rob anywhere from 30-40HP.  Is there any proof that the TH400 will rob that much HP?

All automatic transmissions rob anywhere from 18-20% of engine horsepower. Manual Transmission rob 13-15%. So, either way you go, you will lose power. That''s just the way it goes. If you''re running 300 at the crank now, you should expect a 50-60hp loss through the drivetrain.
 
As for your transmission choice, if it has to be an automatic, i would go with a th400, or a 700r.
 
Have you considered doing a manual swap?

I swapped in a built-up TH350 last weekend.  It was a straight forward swap from the TH200 with no modifications.