Tucson T4R

My son has a my old 1990 T4R with about 239K miles on it. He just rebuilt the engine and installed a new clutch after hydrolocking the engine in 4 feet of water. :-) Ah the lessens of youth. Everything works great now except the 5 speed manual trasmission is overheating just driving around town. You can't even touch the casing after a short 12 mile drive at in town speeds. All diff, transmission, and xfer case fiulds were drained and refilled during the rebuild.

Tonight I checked the transmission and xfer case oil levels. The xfer case was fine but the transmission was almost 1.5 quarts over full. I drained the transmission back down to the proper fill hole level.

My question is, can the transmission fluid in a manual transmission being overfull cause the transmission to overheat?? I've never seen this before but I can't think of anything else that might be causing the trasmission to run so hot. It never had that probelm for 230K miles that I owned it. We'll drive it tomorrow with the transmission fluid at the proper level and see if it makes a difference. Any thoughts from anyone with experience in this area would be apreciated. Thanks.