Mike,
If there is no pressure coming out of the governor at speed, it's because the governor weights are stuck blocking the flow completely.

From looking at the flow diagrams, the rear clutch feed in the case is the same circuit as the governor feed. Meaning if the governor didn't have any flow going to it, the rear clutch wouldn't apply either.

The problem does not appear to be in the valve body.

Didn't this thing have a stuck/burred governor weight in it the last time we took it apart? I remember you taking it home to fix before we put it back together. Is this the same trans, or the junk yard trans now in the car? (Easy way to tell... is it painted black? Or did you paint the junk yard trans black?)

If the governor pressure doesn't rise with speed, it won't make the automatic 1/2 shift like it should.