if the governor was bad the trans would not shift out of 1st or if it was stuck in an open position it would lock out the lever in N and prevent shifting into R.

Your problem sounds like something the valve body is making it shuttle between the two speeds. I read about this problem a long time ago here on the forums, the person had to partially disassemble the rear part of the valve body and clean out an internal screen. Cant recall exactly what it was.

__________________
2012 BMW X5 (Beef + Granite suspension model)

1995 E300D - The original humming machine (consumed by Flood 2017)
2000 E320 - The evolution (consumed by flood 2017)