For transmissions in general, sudden loss of drive / line pressure is usually caused by ears breaking off the torque converter hub / inner front pump gear. The pressure regulator spring could have broken, but I'd expect you to have at least some pressure.

I'm not sure what pressure port you are using, is this modulator pressure? ( 40 is way too low for line pressure )

Find the line pressure tap and check that ( I don't have a location or pressure specs )

You can also pull both cooler lines from the rad, place them in a bucket and start the engine looking for flow.

A 900 to 500 RPM drop is pretty large, that is a function of a miss adjusted idle ( fuel ) system. ( Probably lean )