The first thing you need to do is get the tranny power flushed.
And not the aerosol cans of flush you buy at the parts store.
Don't go to AAMCO either.
Certified transmission or a reputible service garage can do this. It averages about $160. The contour uses a CD4E series automatic 4 spd tranny. It has a history of overheating. It was used in the Contour, Mystique, Ford Escape, Ford Probe, Merc. Cougar, Mazda 626 and MX-6, and Mazda Tribute. all had the overheating problem that cooked the tranny fluid. They run hot.
The overdrive light starts blinking I bet when you drive it on the interstate at highway speeds for about 5 or more miles... then it shifts real hard (whiplash effect). Turn the car off and reset the transmission controller and the light stops, and it shifts normally... this doesn't fix the problem though.
Primary solution is to flush the tranny. You have to do this to save whatever life is left in the transmission clutch disk/packs.
The CD4E does not have a filter in the pan, but a screen. It's located on the front of the transmission, not the bottom. The pan is hard to get at and is easier to do if you remove the tranny from the car. .
As i said, have the tranny flushed, then, pick up a good "stacked fin" oil cooler from your parts store. They run about $70 for a good one. If you get the tube/fin ones, they average about $30 but only cool half as much for the area they take up.
You can get a used one out of the early model ford Explorers (92-94) with automatic transmissions. They run about $5 to $10 at the junk yard.
Find the Transmission cooling lines going into the radiator tank and using a mini pipe cutter, cut the return line that goes from the radiator back to the transmission about 6-12 inches back from the tank. Get some heavy duty rubber oil tubing from your auto parts store and divert the output line to the cooler and then back to the tubing that hooks to the transmission...
You can even add an externally mounted oil filter, like the one used for the engine, next to the cooler giving you a great way to maintain your transmission even longer. A filter you can change like your oil filter.
Either way, you'll cool the fluid properly and extend the life of your transmission. The blinking light is a warning, like your check engine light, to get you to check the transmission... ie... I'm running too hot!!!
Also, here's a web site with photo's on how to do this....