Shift Kit

So your saying it stays in low all the time? Or did you mean it kinda acts like it's shifting out of first gear into neutral?

Water isn't the best thing to use cleaning a valve body. You should have just used carb or brake cleaner to degrease it then you lube all valves with a little ATF when you install them so they work free. Cast iron rusts so quickly and those valves are really tight tolerance to the bores so it's possible the 1-2 shift valve stuck after you assembled it.

Over full on ATF won't cause your issue but if it comes down to having to take it back apart again don't fill it quite all the way full when you put it together. Like I mentioned earlier fluid expands some when it heats up. I always fill them to the add mark when their cold and when they heat up their usually right on full.

How fast did you run it up to when you test drove it?