It may be a head gasket, cracked head, or block. Those are good engines but that is a big car. If I was going to use a newer engine I'd use a Dodge slant 6. Keep it Mopar.
Usually the OD cable is pushed in to be in OD and pulled out to keep it out of OD. If all is working well it should shift into OD when ever you let off of the gas above about 24 mph is 2nd and high. If it doesn't there could be a blown fuse, loose wire, bad solenoid, relay, governor, or a real problem with the OD unit it's self. When these work right they are really fun to drive. There are manuals and web sites that can tell you all you need to know to make them work. They are really pretty simple.
