Ford c4 transmission question

[Matt Warner]

I have a later model c4 in a 66 Comet behind a 289, it is a pan fill model i believe a 1977 vintage case it has the larger bolt patern converter. My last trip to the track it would not shift into high gear, it had a stock valve body with a shift improver kit in it and I was shifting it manually, 1-2 shift was ok but on the 2-3 shift it would just stay in second gear until i lifted off the throttle a coulpe times then it would shift into high gear, once in high gear it was fine, no slipping or anything. I was running it with no vacuum line to the modulater, had been running it this way for 20 passes or so with no shifting issues. I put a vacuum line back on the modulater and had the same issue, no high gear till I lifted off the throttle a couple times, last year I ran it with a vacuum line to the modulater with no problems, I thought running it with no line would help it hold with higher pressure better and apparantly I am an idiot for thinking so. I have installed a Performance Automatic brand reverse manual control valvebody with no transbrake thinking this may cure the no high gear issue, while installing the valvebody I noticed the fluid was still good, not burnt what so ever and from what I could see with the valvebody off things looked normal inside. I made it only half way around the block on the first test drive with the new valvebody and it was binding in first gear and flareing on the 2-3 shift. barley made it back. I removed the trans and tore it down to find the fluid burnt to the max and both clutch packs wasted and the front band smoked. Trans has red clutch frictions with kolene steels and both bands are kevlar, sonnax billet servo and a deep pan with an ATI converter. One mistake I think I made was not putting teflon rings on the stator, it has stock cast ones, top two rings on the stator are worn on outer edge that rides inside the drum, bottom two rings are like new still, there are two shiny spots inside the drum where the rings ride but no groove can be felt with your finger. is it possible that the rings were my problem to begin with and I made it worse by removing the modulator line, and even worse by installing the manual valvebody? Will I be ok to rebuild the unit with the same style components and this time put teflon rings on the stator? or am I missing something here completely? Reverse engagement was always good even with the new valvebody, first gear engagement was a little slow with the new valvebody, I pruchased this valvebody new from Summit. I havent heard too much bad about PA valvebodys. Any help with this issue would be much appreciated. By the way I purchased the valvebody part number PA26304, supposed to fit 1970 and later c4. It did have all 3 gears on the road test but binding in first, second was normal and flare on the 2-3 shift.

Thanks, Matt