Just a thought here . Are we certain its a sm420 , in some of the bigger trucks 1st and 2nd were in the normal position but 3rd was in the 4th gear location and 4 th was in the 3rd location . the reason was 3rd was direct drive and 4th was an o/d . this could explain the unwillingness to enter the next gear as its could actually be dropping a gear . If the trans. had been changed it might not match the tag on the dash for shift patterns .
John