TH350 wont go into 3rd
 

My buddy picked up an 81 Malibu with a 355 / TH350. After finally fixing the drive shaft that vibrated really bad, we noticed the car would not go into third. Checked the fluid level and it was good. Drove the car until the trans was warmed up, drove it when it was cold...no third. The weird thing is, it will just keep building RPMs like its in second gear, no flaring like it wants to shift BUT when I go to downshift manually (when shifter is in Drive) It will downshift twice like its coming out of third and then out of second. Any ideas?

Does it have an aftermarket shifter?

Yes, a B&M Pro Stick

Make sure it goes into drive at the detent/linkage.

If it has a 456 rear you wont notice the 1/2 shift and think its staying in second TOO test the idea - manuel shift all the gears up and down - jz

Its 3:73s and I did test it, I manually shifted it and 1st and 2nd were there no 3rd.

than its the high clutch has gone away - seals or clutches or both