RPMs dropping while coasting

I have a 99 XJ, about 50,000 miles, stock. When I am driving on the highway and let off the gas the RPMs will drop down to 800 then back up to 1500 at about 60mph. It fluctuates like this until I give it gas again. When the RPMs drop it also slows me down. Anyone have any ideas? I took it to the dealer and they looked at me like I was an idiot. The mechanic test drove it and told me to try cleaning the IAC and the throttle body. That didn't help. Anyone ever have this problem before?

Thanks in advance
Shawn

The torque converter is unlocking. I believe it's supposed to do that, for better gas mileage. What I don't understand is why yours fluctuates between 800 RPM (which is essentially idle speed) and 1500 RPM. Sounds like you're not really "coasting" with your foot completely off the throttle, but driving at neutral or partial throttle causing the converter to get confused and go through a repetative lock-unlock-lock-unlock cycle.

Eagle, thanks for the quick reply. I forgot to mention I took it to a tranny shop thinking it was the transmission but they said that it was fine and they were recommended by the guys I used to offroad with. I am wondering if it is a bad sensor, but I don't have any codes. Also when it drops down to 800 rpms it feels like I am slowing down, almost like the brakes were applied.