Freightliner Problem

I would say that the transmission needs looked at asap. It maybe on its last leg. From what you describe I think the motor is fine. The only thing I don't understand is "the engine is not taking oil". If you don't have to add oil in between oil changes, thats a good thing.

 

We've got a T-600, Detroit, 10 spd autoshift, I'm not sure about the squealing noise, but the jake brake coming on sometimes is probably normal. I think the computer is telling the engine to do that to make sure the engine slows down quickly enough to complete the shift. Ours does it more when loaded, in the lower gears, but will also do it sometimes when it is empty in situations where you wouldn't think it would be necessary. A friend of mine told me about a trick, if you don't want the jake coming on between shifts, take your left foot and touch the clutch pedal just enough to open the jake switch on the pedal, and it won't activate the jake brake. But there are a lot of times when it almost has to have the jake "burping" between gears to make the shift- taking off loaded, turning a corner loaded and shifting at the same time for example.

Ours sometimes shifts a little rough going from 5th to 6th, kind of grabs, instead of smoothly going into gear. Not sure what to tell you about the squealing, I'd change the tranny oil and see what the old oil looks like.