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Before you remove or rebuild the OD unit, Grind the sides of a 1 inch crows foot wrench to just inder 1/4 inch and remove the solenoid, open it up and clean it out. You have the classic symptoms of an OD unit that is "in between" no OD and full OD.
No reverse means the cone clutch is off the output bell and one way it can not return is if the solenoid does not return to the off position. The fluid cannot drain out from behind the actuating pistons so the cone clutch floats.
This seems to be quite common in the early 700 series for some reason.
Duane
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