Engine "waffing" around 2500 RPM

My 2000 Olds silhouette (minivan, automatic) won’t rev past ~2500 RPM when in gear. At that point the engine starts “waffing” within a few hundred RPM of that speed. When the engine is in park or neutral the engine behaves normally and has no problem reving.

I’m rather confused by this, as I would not expect a transmission issue to limit the engine speed…I’d expect quite the opposite. On the other hand the fact that the problem doesn’t manifest itself in park or neutral is an almost sure sign it is transmission related.

Any thoughts on what may be the culprit?

I’m sorry, but what does it mean when you say “waffing”? What is it actually doing…just stopping at a certain RPM, bouncing around right before a certain RPM, or what?