Re: Trans problem
You were told correctly, it's probably that the torque converter splines sheared. If you have forward that seems odd, usually when these go you have no gears at all, no reverse and no forward.
I would have it checked anyway. Since this is pre electronic diagnostic you will have to take it to someone who will drop the tyranny and look it over. Newer cars can just be hooked up to a computer and that will tell the service tech all he needs to know. These older cars need someone with some experience.
Don't take it to the Ford dealer, I did once and they know nothing about my 85 Bird. Call around and see if you can find one of the "Old Timers" who know these older cars. Some tyranny repair shops might be able to help but I have my doubts.
Hope this helps