Is it staying in 2nd and driving the wheels - just not shifting into 3rd - or is it leaving 2nd and then just spinning with no output to the drive shaft?
If it is just unable to make the change from 2 to 3 but still providing power, you might get lucky and find that the detent switch on the gas pedal is stuck closed. Unplug the connector from the switch and test drive:
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If you find it is always closed (which would keep you in a state of perpetual "kick down"), don't immediately go out a buy a new one. These switches can be reset most of the time:
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Another possibility that would keep you from upshifting is if the solenoid valve itself is stuck open - the fix for that isn't as easy as the switch but it's still would not fall under the heading of a major job. The valve and it's operating coil are located under the metal cap indicated below. If you drop the pan it will be staring you right in the face:
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It is generally possible to test the function of the valve/coil just by listening for an audible click when 12 VDC is applied to the coil. Either have someone repeatedly open and close the detent switch by pushing the gas pedal to the floor and then releasing it (ignition switch in the RUN position). If the valve is stroking as it should you will be able to plainly hear a snap each time the detent switch is closed.
If you can't find a helper, you can do the test yourself:
1. Somehow jam the accelerator all the way to the floor - so that the detent switch stays closed.
2. Check that the switch is working with a meter. Either check for voltage on the orange wire coming out or (with both leads removed) verify continuity across the switch when the gas pedal is floored. The voltage test is better because it also proves voltage is available form the fuse block
3. With the switch held closed, go under the truck and (again with the key in RUN) pull the orange wire off the terminal on the exterior of the transmission casing (indicated by the yellow arrow above).
4. Then just touch and release the orange wire from the tab repeatedly and listen for the tell-tale click that indicates the detent valve is stroking open and closed.
If these tests of the switch and coil/valve show no issue with your detent system, things get more involved. Here is what the GM diagnostic chart says may be the problem after the detent function is eliminated:
3. Control valve assembly may be stuck, leaking, damaged, or incorrectly installed.
4. Check direct clutch case center support for broken, leaking or missing oil rings.
5. Check clutch piston seals and piston ball check in clutch assembly.
