Be wary - the TorqueShift transmission on this truck is an excellent, superior unit. However, for a run in 2004, there was a flaw in the reverse planet assembly. Ford had a owner program for replacement of the reverse planet, but some trucks did not get done. I have no way of knowing if your truck was part of the program or not, and if it got repaired in 2004-2006 or not.
The symptom is directly from that program states: harsh/slipping shifts and/or harsh/delayed forward/reverse engagements.
The Tow-Haul light flashing indicates something is going wrong, and it is going into the memory of the TCM (Transmission Control Module). Have a diagnostic test performed soon. This is a great transmission that is readily repairable by qualitifed technicians. But anything left without repair can also have catastrophic failure. Good luck in the New Year.
It may just be that the transmission needs to adapt it's shifting program, which often happens after disconnecting the battery. Try driving it for a few more days and see if the shifting gets smoother. If it doesn't, I would have a shop look at it to see if there's something they can do. Have them check that the transmission software is up to date too.
