I think you are on the money.
Sounds like the Torque Converter Clutch (TCC) is not firmly applied, resulting in a slip/stick condition that feels like an engine surge.
A driver circuit for the TCC in the PCM is the common failure that causes this. This problem is unique to this body type and of this year , '99-'01.
First let's rule out the easy one... exhaust.
1. Disconnect the Exhaust Gas Recirculation (EGR) valve and retest.
2. Reconnect the EGR valve, clear codes and disconnect the Mass Air Flow (MAF) sensor.
3. If the problem is gone, check the exhaust backpressure to be less than 1lb at 2,000 RPM in Park/Neutral.
4. If no problems are found, use the scan tool to command the transmission Torque Converter Clutch (TCC) on during the surge to check for a possible TCC related problem
I would reccomend using a scan tool, so you can over ride the TCC settings.
1. Clear the codes and test drive the vehicle with the scan tool on it. Monitor the Torque Converter Clutch (TCC) slip RPM and the TCC duty cycle.
2. Verify the slip RPM jumps around with the surge and if the duty cycle ramps up to try to eliminate the slip.
3. If the slip RPM and the duty cycle are erratic, use the scan tool to command the TCC on overriding the Power train Control Module (PCM).
4. If the surge is gone, most likely internal transmission valve body problem instead of the transmission torque converter.