I saw this exact same problem summer before last with a buddy's truck. Band was so loose the strut fell out and it lost 2nd gear. Dropped the pan and VB and put the strut back in and tightened the band and assembled it and it's still working fine.
As Pete mentioned, if the front band linkage is intact you need to pressure test at the front servo apply port with about 35 lbs of air to see if the servo is working and applying the band. If your not sure what port that is I can scan and post a page from the factory service manual that shows it.
