They just don't build cars like they used to... Your transmission is computer controlled. Just like many of the solenoids under the hood for the engine, the computer not only controls shift solenoids, it has the ability to detect certian failures and will set trouble codes that can be pulled to assist in the diagnostics. Notice I said "assist", pulling a code is only a single step in the process. But yes there is a fuse that controls power to the solenoids. I'm going by memory here and do realize that they have a habit of moving these around model to model, year to year. Yours should be in the fuse block under the LH side of the dash. Note as well it's extremely common to have a bad ignition switch cause transmission problems because before the power gets to the fuse to go to the transmission, it first comes from the ignition switch. So if you want to test fuses, test them all (even the ones in the underhood block), key on with a testlight or voltmeter. The main point is with a solid diagnostic routine this isn't normally a difficult repair. However just the "someone said it could be a fuse" approach is one to be avoided. You need to pull the codes. You need service information, which includes a schematic. You should have a scan tool not only capable of displaying serial data from the VCM/TCM but be capable of two way communication so that you can commmand solenoids on and off for testing. (aka GM Tech II) You need to be able to monitor commands and signals with an occilliscope to confirm the data that is being displayed on the scan tool. You should have and understand how to use a low amps current probe to go with the o-scope.

BTW, the outline above is how you can tell a real technician these days as compared to a wanna-be. It does not mean that it's impossible to do this without the right tools, equipment, and training. But there should be a reasonable return on the investment for those that have indeed made the investment.

The transmission in your truck has computer control for the TCC (torque converter clutch) control only. The Shifting up and down is hydraulic and controlled by the governer (road speed) and throttle valve (throttle %) If you have only 2nd and reverse, you have an internal problem. A broken governer will keep the trans in 1st gear (no governer pressure) and a broken throttle valve cable will either result in 1st gear only, early and slipping upshifts or late and hard upshifts. None of the above will cause 2nd gear only. Looks like time for a new trans to me.

That transmission is garbage from new. There is an upgrade kit and mods. to be installed after the rebuild, and yes yours needs the rebuild but to be absolutely sure it should be opened and checked. You might be lucky and only need the kit and mods. but not recommended. Have it rebuilt. The kit is only $1500.00. After that you have a very good transmission. make sure you install a trans cooler and change the converter. The fuse controls converter engagement. If it's blown the vehicle
will not move in any direction in any gear. Don't waste
your time and money with a used trans. unless it has had the kit and mods. because your right back in the same boat.

I'm afraid I must disagree with john_g's normally sound advice. A TH700R4 of that vintage is shifted hydraulically, with no computer involved except for TCC lockup. This sounds like a case of an internal mechanical failure.
This statement, however: "The fuse controls converter engagement. If it's blown the vehicle
will not move in any direction in any gear." illustrates the typical caliber of knowledge and misinformation on this forum. In reality, the fuse protects the torque converter clutch circuit. The TCC engages at around 50 mph to form a solid engine to transmission connection and improve fuel economy. A blown fuse here would result in a vehicle that moves and shifts normally, but runs at a slightly higher rpm in 4th gear.

OK, at the shop this morning to double check. Yes the '88 is NOT computer controlled. It's just funny how the description of the failure matches what we typically see in the computer controlled versions when the system defaults to limp in mode. No shift solenoid control results in second and reverse operation only, because they are the default positions of the transmission manual valve. Is it possible the O.P. started us off with his description based on someone elses guess first? Maybe if driven we would see the actual symptom is slightly different than what was originally posted. Which of course leads to the first step of the diagnostics, road test and confirm the reported problem!

Do note one thing in particular about my response. I always stress test, don't guess and utilize proper service information in the process. No-one should be able to find fault with that because this is a perfect example about how starting off with a pre-determined idea about what is wrong leads the person having a vehicle problem way down the wrong path. By proper testing first, the O.P. would quickly see that there were no codes setting, and that the schematic would not have had any shift solenoids for the PCM to control. Note again, this is in fact somewhat typical of what happens in the shop. Though unintentional, the O.P. by trying to find out information first could walk into the shop and instead of sticking to the details of the vehicles problem, introduce information that could actually lead the tech down a false path until the real symptom is observed first hand by the technician. My first clue that bogus information was provided if I was to work on this truck this morning would be no MIL, and there would no codes for the shift solenoids, or transmission inputs.

So now why is it stuck in second gear? Some have already said to tear it out and replace it, again it's way to early for that. Testing needs to be performed. This thing could have broken the detent cable, or it simply could be disconnected from the throttle linkage. A governer valve could be froze, and/or shift valves frove in the valve body. There is also a 2-4 servo fault that can occur and cause second gear starts, and a very late but achieveable shift to third. The catch 22 comes from being a technician that can go in and diagnose and repair a simple confirmed fault today, without rebuilding the transmission, "today". Only to potentially see the unit have to be pulled and completely rebuilt at some time in the near future, and then have the effort of only doing exactly what it proved needed today be treated as if it was the wrong thing to do. In otherwords, it can be shown it would be wrong to just fix it, it can equally be shown it could be wrong to go all the way and rebuild it. It all comes down to fate, and someone elses "opinion".

Again in the end, take the information provided, then roadtest and confirm that the information was accurate. This is just one of the reasons that people CANNOT reliably guess what part needs replaced when someones car has symptom XXXXXX.

I am sorry for the confusion here. I ment to state that it shifts up to 2nd gear and reverse. No 3rd or overdrive. It did start to slip though and bam,3rd was gone and overdrive was gone.I was thinking quicker than I write. But to lose 3rd without any notice is what I was stumped about. The sliping was not all that bad either and just started and the next day 3rd and over drive was gone. Also I noticed the cab was not aligned with the bed and and I checked it and the body is solid but the cab mounts rusted out tilting the whole cab down and is resting on the frame.Could this have anything to do with no 3rd or overdrive. The linkage is working all fine from the column to the tranny lever. Again sorry about the details being not so precise to all on here. Thanks for the input.

OK- When you have 1st, 2nd and reverse but no 3rd or 4th in a 700R4, the problem is usually due to a burned up 3-4 clutch pack which means overhaul or replacement. You should be able to smell a charcoal odor in the transmission fluid on the dipstick.
This trans uses the 3-4 clutch and forward clutch in 3rd and drops the forward clutch and applies the 2-4 band in 4th. When it slips/neutrals out in 3rd and 4th it's because the 3-4 clutch is done.