Transmission not engaging?

This light also doubles as the Malfunction Indicator Light for the transmission. Have the system scanned for codes. There is a good possibility that you just have a sensor failing. Are there any other symptoms? Like soeedometer jumping or overall late shifting? Are tachometer indications normal for load/speed? These guide can help us fix it

https://www.2carpros.com/articles/automatic-transmission-problems

and

https://www.2carpros.com/articles/checking-a-service-engine-soon-or-check-engine-light-on-or-flashing

Please run down these guides and report back.

Could be a shift solenoid. If you can borrow a breakout box or get a wiring diagram, you can test the solenoids from the outside.

Not all rebuilt transmissions are created equal. Especially after 6 months of service and a trip through a salvage yard.

From the sound of things, you have another failed transmission on your hands. This may have been caused by debris in the cooler lines. Is important to flush out the cooler lines when replacing a failed transmission. Material given off by failing components can lodge in the trans cooler, and return to a replacement transmission and cause the replacement to fail. Worse yey, if the cooler is blocked or restricted, a replacement transmission will have a short life.

I have rebuilt many of these units, and have had great success, including my own. Mine now has been working perfectly for 5 years since rebuild.

Unfortunately, some rebuilders will overlook some of the really important finer points of the transmission. One of the things that causes early failure is rear unit end play. The direct clutch runs on two delicate rubber seals. Excessive end play will destroy these seals in short order because the direct clutch drum will not run true, and can wobble. Clutch pack clearances are also important. Too loose, and they will jerk on engagement. Too tight, and they will drag and cause early failure.

My best suggestion is to make sure that the cooler is clear, the converter is clean, and start again with a rebuilt unit.

Have you had any trouble with the transmission in the past? Is the fluid full and clean? The reason I ask is this. Yes parts of the transmission is electrically controled, but there usually a build up to this type of problem. My concern is that the transfer case jumpped into neutral and not the transmission. The 4wd actuators on these vehicles have a history. Have you tried changing it into 4lo, 2hi?

Let me know.

I'd say if the transmission fluid is ok, check to see if your shift cable is tight. If not, it may not be engaging the transmission like it should.

Lucas is the best of the best.

How much did you put in?

If the brake is hung up, it probably will need new cables. And if your brakes are bad, front and rear service shouldn't be more than $200. If I were you, I wouldn't get a new swaybar and bushings unless the car is handling extrememly poorly. Also, if the ride is very rough depending on how many miles the car has, the shocks may need replaced. But with the suspension setup that Ford uses, none of these should be big jobs and $1100 sounds very pricey for that work. I'd get a couple estimates somewhere else.