Well, how hard do you drive your truck? Honestly, these 4L60E's in these huge trucks don't last super long if you beat on them. A friend of mine has a '97 Yukon Z71 and he is on his THIRD transmission. He does beat on it, but still... this are utility vehicles made to take abuse. I'm not talking towing and offroading 24/7; I'm talking also mashing the pedal all the time and full throttle shifting. That stuff take a toll on the trans.
If your cat(s) is junk, that may have a lot do with it... you have a 1999 OBD2 truck: these are very computer dependant. All the sensors in these trucks create a computer loop system, and if you are getting bad readings and one or more of the sensors are kicking out or getting errors, it makes the computer unable to manage the vehicle at 100% capacity. You'd be suprised how much of a performance drain just losing one sensor can cause. Have you seen an engine light come on at all? I would scan the computer and see if it had any codes come up recently, maybe one of your O2 sensors after the catalytic converter is kicking out and reporting an error back to the computer.
If it IS the trans, then yeah... a rebuild or replacement is in order. GMDYukalade gave you some good advice: if you do end up dumping in a new trans or revamping your current one, do the right thing and treat it with some good hardware. Factory tranmissions in these later model vehicles were designed with smooth driveability in mind, so they have a lot of delay and overlap in the shifting. While this DOES make them shift smoother, it destroys their longevity as a side effect. Getting 1-2 and 3-4 servers and such, and installing a nice automatic valve-body shift kit would not only make your trans perform infinitely better, but it will also really help extend the life of the hardware. Also, get a bigger transmission pan to hold more fluid. This will help keep it cooler.
Transmission kits and servos are really nice because they are still fairly driveable, though they do make the transmission shift a lot harder and faster. I don't have a kit installed on my transmission personally, but I understand from reading some testimonials and such that they provide a fairly mild ride when keep the throttle more relaxed... but if you mash it, the servos and shift kit will really give you a ride. You'll be chirping tires and flying through gears while you get jerked back and forth in your seat.
I certainly hope it's not your trans though; I had a tranmission scare a few months ago, but it turned out it was an O2 sensor problem mixed with an EGR valve problem. The truck would hesitate when going from a stop, it would surge and have an uneven idle, and the rpm's would just die when I was at part throttle. right around 2000-3000 rpm's it was like the gas pedal did nothing at all unless I really put it to the floor. I ended up replacing the O2 sensor and the EGR valve (like $130 all together if I remember correctly) and it ran like a dream afterwards. Like I said, check your sensors before you start pulling your hair out.
