Shift Kit
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.
The reason I know for sure that it will, because it's what mine was doing when I first got it.
It would shift out of first and go right into third and I drove it home like that.
Once home, I pulled the pan to see if the front band had snapped and found the front band adjustment so far off that the servo pin for the band wouldn't travel far enough to apply the band.
Once adjusted, it shifted 1-2-3 perfectly.
I did have engine braking in manual low, but If not going fast enought to go into 3rd it would freewheel in low when the gear selector was in drive.
(This is the reason I was almost positive it was a 1-2 valve issue.)
I really hate to say this but you may end up having to get a different and working VB and start over.
Even if one of use was right there looking at it with you, we might not be able to tell what it is after not seeing any of it for ourselves.
It still could be a hung up governor though I think.
