Shift Kit

Yup I'll check it. How do I properly adjust the screw that holds it in, I measured it so it's in the right position but I'm not sure how to adjust it actually.

The only time I've read anything about the adjustment is in the factory serv. manual and it says it's adjusted with a factory tool. If you put it back where it was (or even close) I doubt that's your problem
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Ok so I took the plate of too look at the 1-2 shift valve and everything there and everything's moving freely except the 1-2 shift governor plug binds if you don't push it in just right. The springs very stiff as well, don't know how soft it should be.

Sorry, no comment on how stiff the spring should feel. Can you pop the end plate off your other valve body and push the valve in on it to see how it feels? I know it was a lockup VB but that part of them is the same so it should feel similar. I'd pull the governor plug out and check it for burrs.

What else could this be?
-Improperly installed spring
-Improperly installed vlave
-sticking valve
-Improperly installed check ball

any of those I guess but what's more likely?

Really any of the above can/will cause a major issue. Did you get around to checking the front band adjustment just to make sure there isn't an issue there? I believe TB is right that it should shift directly into 3rd if the band is still way out of adjustment but I'm not positive. It's something that should be checked just to rule it out.