I would first say it's Vac Mod BUT since you said it just "Dropped Down" into first. Vac mod wouldn't have done that. It just wounldnt up ****, but one there, it should have stayed there.
So, next to check is governor, but again, I find it hard to believe that even a governor would allow it to just "drop down" to first.
Do check those first though. The Drop Down part is what gets me. EVen if you lost a clutch pack, the trans should have just spun up into like it was in N and not drop down.
So now that makes me thinks something may have gone wrong with the Detent Cable or Detent valve aka Kickdown. I have seen Th350's get a stuck TV valve and it never shifted out of 1st. Replaced the stuck cable and all was well. In that case, Guy hit the WOT, downshifted to 2nd since was already moving at 40mph, then it went on into 3rd afer like 70mph, but then after he came to a stop, it never got out of 1st again and he called a tow truck. Lucky for him, I had it fixed in an hour for $80 when he out trying to get a loan for a new trans.