I think you need to describe the problem better. From what I read (several times over to help me understand) you say that when you switch to OD off the car drops to 1k rpm? That is not normal, the RPM's should shoot up as you drop to 3rd gear.
If your talking about having the vehicle in OD off mode (OD light on) than flipping the OD back on (OD light off) than yes this would be normal at about 40MPH. However if I remember correctly my bird used to be at about 1100-1200 rpm and you could use cruise control.
Now if it drops to 1k rpm when your going a much higher speed and switch OD in either direction, something is wrong. I am not going to guess at every possibility without more information though.