I'm going to assume the modulator valve is in the correct way. The governor will cause the tranny to not shift from first to second, but I doubt that the gov. has gone bad just sitting there.
The modulator would cause the shifts to come later, but they would be there. Did you run the RPM up pretty good in "DRIVE" when you did your short road test? If not, you might not have gotten a shift- and I'm not suggesting you go blowing through the neighborhood at 5000 RPM in first, either!
You should check to be SURE there's vacuum at the modulator, and that the vacuum is plumbed to manifold (NOT ported) vacuum. And that the modulator valve is in correctly.
You should be able to draw a vacuum w/your mouth or a mityvac to get the modulator to retract. You can't see it retract (unless you're in front of a mirror), so stick a straw into the end to see that it works. And it should hold a vacuum, as well.