I am going to guess the forward clutch pack (rear position) is smoked.
If it was a full manual valve body with no low band apply, and the sprag failed for some reason, second and third should still apply. If it was a stock style auto shifting valve body and the sprag failed for some reason, I would expect the low band to still apply first gear in manually selected low 1, as it should.
Please update when you find out. I just like puzzles.
