1991 GMC 2wd transmission won't go into gear

Recently I bought a 91 seirra GMC. The kid says it had a new transmission put into it recently that has a shift kit for towing, thus causing it to shift hard. drove it for like a week with no problems. I did notice the more I drove,  the easier it shifted, before I'd have to reach a certain speed to make it shift and it would shift reply hard from first to second. Past few days, noe of that. On my way back I let off the gas it was coasting, the check engine light came on, hit the gas again and it only revs. Its parked on a level ground. Checked the fluid with the engine running and it's good. now while in reverse or drive it makes a funny, off beat sound. Muck like a bb in a soda can. But it does not go into gear and only revs up,  no movement. The kid said it had the granny it was supposed to have stock... A 400 rs..... ( stock is most likely a 4l60e or possibly a 4l80e ) th400 is the closest match I can find to this alleged 400rs tranny the kid told me about. Has a new drive shaft and u-joint. Also a 2wd. Any answers PLEASE!