Hello,
How is the fluid? Dropping the pan to get at the solinoid, did you notice how the bottom of the pan looked? Anything other than the usual grey sludge would indicate a more severe problem. Wiring should not be bare, shorts could result.
Can you manual shift to 2nd? Is the OD still engaged when you do this? If the fluid is burnt or does not smell "new" then you have FOD floating around, again check the pan any chunks? The place I am going is valve body problems, any and I mean any FOD in the valve body will cause a number of problems. Including OD dropout, or no dis-engagement. Also, the converter could be the source of FOD as well.