TH400 Shift Oddity

[tclaremont]

Put the truck in Drive and nothing happens. Run the revs up and the truck does not move.

Put the truck in 2nd, and it shudders and wants to go.

Put the truck in 1st and it moves around as expected.

Unplug vacuum line to the shift modulator, and drive works again, but I suspect (have not confirmed) that it will not upshift to second or third this way.

Trans fulid looks clean and at the correct level once warmed up and in park.

Second question, there is a wire with a male plug on the end hanging right next to the shift modulator. It starts up high in the engine coparmtent but It is not connected to anything down underneath, and I do not see anytwhere for it to hook up.

Am I right to suspect a bad modulator? If so, does it just screw into the side of the tranny as I suspect? It has been forever since I worked on a 400 trans, but the last one I DID work on had the same symptoms and solution (modulator)!