I recently rebuilt a 700R4 on my son's '87 S10 Blazer. He bought from a guy that duped him into believing that you don't put it into OD until you reach 55mph... Well anyway, it was slipping terribly and barely moving at all in OD, but R & 3-2-1 somewhat worked to move it around the driveway. The TV cable was loose, but it was already fried beyond use. I tried a $400 junkyard swap with an '85 that they said would bolt right up and work, but they lied!! About 32 days into the 30 day warranty, it began making clunking noises under load. I later discovered that the internal wiring is different for the TCC on these and you cannot just put the '87 wiring plug back on that one.
So I rebuilt the original trans. I found the problem there with ours was the 1-2 accumulator spring had broken allowing the slippage, but the clutches were toasted by this time. I ended up putting an entire rebuild kit (steels, frictions, seals & bearings) in it along with a 700 junior shift kit for about another $400 from my local trans shop, and it seems to working fine now. That local shop would have wanted $1200 at least for this work (out of vehicle), but I was also lucky enough that the guy was willing to answer some of my questions to confirm that I got the clutch-stack clearances right. This shift kit places the accumulator piston in between two springs rather than resting on top of one (the one that broke), and requires minor grinding on one valve in the valve body. The rest was simple parts replacement.
While I've rebuilt about everything else in a car, this was only my second time digging into an auto-trans other than typical fluid/filter change, and my first full rebuild. I only needed to buy one tool; the KD Tools brand spring compressor at about $120. The clutch kit came with a flat round plastic lip seal installer which (unintentionally to the supplier) doubled as a teflon ring compressor with the old rings slipped in place over it to hold the news ones as they recompressed. No need for another special tool there. I already had some big snap ring pliers and extra long needle-nose pliers, so those would be needed also if you do it yourself.
On yours, should you decide to do it yourself, get the ATSG book and suppliment. They are well worth the $50 for both and can easily be found online. The suppliment describes more about the different wiring setups on the TCC for the various models & applications (V6 or V8) and all the mid-year changes that happened in '87. Before getting a kit, make sure you have an early or late '87 confirmed by the stamped numbers on the lower rear body by the pan. Also the 6cyl and 8cyl versions are a bit different in the clutch stacking, be carefull in following the directions here. If you lay everything out in order, you should be okay. And YES, plan on thoroughly flushing or replacing the cooler and hard-lines. It was cheaper for me to just replace the stock radiator with built-in trans-cooler system (with the warranty) than to have a local shop flush the old one properly.
Message me if you need some more direct help on this, I am willing to assist however I can. It was a long learning procedure for me to find and decifer the correct applicable information on the '87 models. I did a write-up on about this on an S-10 forum with photos showing my steps of the process and can provide the link to read it if it's okay to mention another forum here. The '85 trans in now a practice tool for my two boys to play around with and learn how it works... and we'll probably sell it later after it's rebuilt.