Ford 7.3L Power Stroke (1999-2003) :: F350 Leaking Fluid / OD Light Start Flashing

Saturday morning my grandpa drove my F350 into town pulling our 4-horse trailer (With living quarters). I wasn't with him, but I was told the following: he started smelling something hot and noticed the O/D light start flashing. Now, this man is not the most intelligent man on the planet and uses the O/D to "slow down the engine" when he starts and stops - i.e. uses it as trailer breaks. I have asked repeatedly for him to quit, but as best as I can tell, he continues to do so.

After the burning smell, a driver pulled up next to him and pointed down - he looked to see smoke and the truck puking fluid everywhere. He said he thought the truck lost power because he couldn't get it to move. Ended up getting it towed. The tow truck driver checked my fluid level and said I had an extremely small amount of transmission fluid left in the truck...which made sense as the fluid was all on the ground underneath, lol. Fluid was NOT red and looked really gross and there was DEFINITE burnt smell to it.

My question is this - what in the world could have caused the truck to do this (I read that is could be from overheating?), and what should be my next course of action? It is home and in my backyard right now (Classy!). It starts and runs fine, but since there is little to no fluid left, you have to hammer down on it to get it to go anywhere. It does move, however.