There are bands for diff gears. Clip is what holds the bands in place. Broken clip, no band. Broken band, no gear.
Modulators take a part in shift timing. A bad Mod can result in late shifts and is a simple part to replace. Doubtful the Mod would cause you too lose 2 gears completely.
There can be a host of issues going on inside. Your trans works on Hydro pressure. Solenoids, valve body, electronic sensors, and switches, all have to work in harmony to operate properly.
A pressure test can be done to give you a more accurate diagnose to your issue, but they do not always give you the answer.
It is better to rebuild your trans then install a used trans. You can install a used trans, just to have it break shortly after, and your in the same boat again. Even if you get a 90 day warranty, and it breaks, you are still out time & labor (plus fluids & filter, gaskets) to swap another out.
Manual swap is a cheaper way out, and if you don't mind driving a stick, this is def a good option. There is a great thread on how to do this swap already for your 1st gen. Search the trans section for it. I believe it is a sticky, on top of the 1st page. Read thru it & decide if it is a good option for you.
