700r4 backflow problem.

Bill's suggestion is correct, but a much less messy procedure works, also.

Measure the depth of the pan.
Get a wire type coat hanger, straighten it out, cut off the squiggly part.
Stick it down the tube until it hits the bottom of the pan.
Mark the wire where it is at the end of the tube.
Pull the wire out.
Subtract the dimension of the pan depth.
Hold the wire and the dipstick together.
File a new "full" mark on the dipstick.
Done.

 

Seems like the next move would be to get it off the ground, clean the trans good and see where the fluid is coming from. Many times ( especially on a GM ) it will leak around the front pump where the oring that seals the pump to the case has failed.

 

My 700r leaked a bunch sitting over winter. Then I moved it in prep for running this summer and there was another leak on the floor a day later. Replaced the rear output seal.....leak gone!

 

First find where it is leaking, it is normal for the fluid level to rise when the motor is off, that is the reason you check trans oil with the engine running.
I'd bet on the dipstick seal or pan gasket.