Got a 96 1500 318-46re 2wd 160K a little over a month ago. PO said he stopped driving it because trany started sliping after driving for a few miles. It sat for about 2 years befor i got it.
I drove it on the trailer and after getting it home drove it to the gas station about 3 miles away and it drove fine and shifted up to overdrive no problem. It never locked up the converter to station or back home. I got a sunax surecure kit and the od/lockup and presure sensor for it and installed them on the valvebody. It was obvious that the pan had been off before. I also adjusted the bands. There was no debrie or shavings of anykind in the pan, it was real clean and i could find no evidence of excesive wear on the drums. I refilled it with ATF4 and I still had no converter lockup. Yesterday I was driving it after putting about 100 miles on it sense the kit and it started down shifting i think to second and the would act normal then acted up again. I managed to get it home. This morning I went out to check it over so I put the rear on jackstands and ran it thru the gears. When I first started it I noticed a kind of grinding/groaning noise from the front of the trany area torque converter area. I dont think it ever shifted past 2nd gear and after it warmed up wouldnt move in forward or reverse. The noise went away. I shut it off and restarted it 10 min later and it repeted the above senario. I had to leave for a few hours and when I got home i went and tried it again and i got the noise but no tire movement in any gear. So I drained the fluid (i put a drain plug in) and see no shavings in the fluid. will pull pan in morning. Could the govenor pressure solinoid cause no drive in any gear at all or do I have bigger problems.

First thing i would is... Remove the short trans line thats up by the radiator that has the "Check ball" in it. They get stopped up or dont flow enough fluid and cause most of the failures i've seen. I just took the one off my 99 and had a hose made up to replace it without a ball in it. See pic. The check ball is in the end of the old hose at the bottom of the pic. I reused the other end that just snaps on. Cost was about $11. Dealer wants $100 for the hose if you can fine one??? I tell everyone with a trans with high miles on it? Do away with that check ball before it burns the trans up. Let me know if it helps yours?

No drive forward or back isn't an electrical problem. You can hook up a gauge and do some pressure checking but, at that mileage, it's due for an overhaul.