i have an auto '89 lude too... when the S3 indicator light somes on.. usually that means something is wrong with the tranny.. i've never :knocks on wookd: had the s3 indicator light come on....
the auto tranny only has 4 gears so it's not missing anything.. so 1-2, 2-3, 3-4.. 3 shifts

..... that high rev is normal on most imports and that's where my car's revs are at at those mph... must be strange going from a domestic to an import....
check out the link
http://www.honda.co.uk/owner/PreludeManual/index.html...
i don't have my honda service manual but that is a comparable copy.. it is also located at the top of the forum in case you need to reference that once again...
6 is the Water Temp Sensor (TWS in the book for whatever reason)
8 is the TDC(top dead center)/Crank censor
the manual will also give you a clear picture of where everything is located... i find this car pretty easy to work on (with the exception if the timing gets all messed up and that is a bugger!)
fyi.. i don't mean to offend you if you konw what TDC and such means, i just want to make it clear for future searches on such a topic for people that may not know...
i LOVE my 3rd gen... for the exteme cheap cost.. it's a great car to have... i've had very few problems (problems i have had were mostly my fault) besides my engine swap, the biggest expense has just been tires.... it's also perfect for living in the city b/c i don't want to worry about a newer nicer vehicle...
welcome to the board and if you have any more questions.. feel free to post
also try doing a search b/c i remember someone having a similar problem and i believe a guy named Todd (another mod on this site) was able to give more insight...(dunno if the search function works b/c our website moved to a different server and host... some things aren't complete yet)