Hi, Harry...Welcome to the YJ/TJ Wrangler forum, thanks for joining! There is a spirited, technically-inclined community building here...
Wow, I got the visual on the Wrangler parked in a mud puddle with a Torqueflite transmission. Barring mechanical troubles like a throttle valve cable sticking or dislodged, the other possibilities for your transmission sticking in first gear are either the governor valve stuck closed or a valve body problem like the 1-2 shift valve stuck or the governor plug stuck.
When you mention the fluid change, I'm assuming that the filter got changed as well. The system probably required a complete flush at a shop equipped to exchange all of the fluid. Otherwise, water in the unit simply pumped into the converter, and if only the pan fluid got changed, there is still that water within the converter—which recirculated through the entire transmission.
I'm an optimist about the fluid contamination as long as the filter was working and sealing properly. This should have prevented any mud debris from reaching into the valve body. Agreed, the vent valve is another story, and I do recommend extending the vent to the top of the firewall in the engine bay if possible. Oil-resistant hose, quality EFI hose clamps and some fittings can implement this change...Where is the factory vent valve located, Harry? Is it accessible?
Another consideration is the speedometer drive, which also interfaces with the PCM. This can fault, especially after submersion in muddy water! Clean and check connections. Make sure there is no MIL light on ("Engine Check"), suggesting a problem with the speedometer signal that could effect the shifts.
If there is actually contamination within the valve body, that's time to consider the Sonnax upgrades during a valve body rebuild. (Follow the link to my how-to on upgrading the valve body.) I'm not sure whether you found mud inside the transmission, and again, the governor is likely okay if the sump filter worked properly.
As for any RWD Chrysler transmission of this type, there is always the anti-drainback valve issue. If contaminants reached that valve, you will have issues with both internal pressure and cooling of the transmission. The Sonnax upgrade is the only way to eliminate this pesky valve—those who otherwise remove it without consideration for the anti-drainback needs of the converter and transmission will toast the front pump bushing eventually.
Trust this helps, I'm here for more dialoguing and clarification...Go through my comments carefully...Share what you know, I'm pleased to respond...Others can weigh in, too!
P.S.: We do love our grandkids, right? Our youngest is 14 months old, they range to college age…The baby has begun to walk…This will keep us in shape!