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You got a leaky spark tube...
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Which transmission is it? The 6.0 uses the 4L80E and the 8.1 and Duramax use the Allison. I have a factory service manual for 2000 model Silverados and the temp sensor for the 4L80E is shown as being located inside the pan. Or as the book says, "Inside the automatic transmission assembly". The diagram makes it appear as if the sensor is strapped to another wire or cable and suspended in pan.

I know the HDs didn't come out until 2001 but I can't imagine the transmission being significantly different from 2000 to 2001...
 
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