When you say the lever "rests against the body of the transmission" where does it make contact? Near the pointed end of the yellow arrow shown?

If the lever swings far enough forward to contact the case in that area, the shaft the lever is attached to could have a broken weld inside the trans. The shaft is welded to a cam and the weld often breaks.

Another possibility is that the tang on the cam is not making contact with the stop screw on the valve body; in either case the pan will have to be removed for inspection.