The shift points depend on the governor. I expect this varied over the years, but it was certainly different for gas and diesel. He says he set the TV cable and then backed it off a couple of notches. To me, that sounds like looser, so the shift points would be lower. If the TV cable were too tight, the shift points would be high, but he never complained about having to rev it to the sky to get out of 1st gear. (remember, I think he is in 2nd gear). A broken governor would also raise the shift points, but again, getting out of 1st would be the first problem.
How high does it rev to get out of 1st gear? Are you sure it ever shifts into 3rd? Is it possible that 2nd shift is the torque converting locking?
It's possible the 2-3 valve is stuck or the 3-4 clutch pack is bad.