Cam -

I had this exact problem on an early 240, and have seen it (and fixed it) on several other cars—including a Triumph.

In my case, it was somewhat as Abe described. The magnetic portion of the solenoid (which is a magnetically-actuated valve) had, over the zillion miles I drove it, become sludged up with a fine black "goo."

This gunk was iron particles that were attracted and held by the magnetic field of the solenoid. It packed into the solenoid so tightly that the plunger (armature) was essentially "glued" in place.

When I shifted outta OD, the magnetic field turned off, but the valve would NOT move, and the hydraulics of the OD stayed on—hence, I had OD in all gears, even reverse (and that's a NO-NO, or should I say, "crunch-crunch").

Removing, disassembling, cleaning, and reinstalling the solenoid solved it. Zero dollars. Tranny 'n OD stayed in place. For me, an easy (and lucky) repair.

(As I recall, disassembling the solenoid was tricky but not difficult.)