Does my Mustang have a low gear?

it is in the front of one of the heads or on the block i think it is the left side just above the oil pan or it is on the back of the heads

Check the vacuum modulator on the drivers side
of trans at rear,the thing with the vacuum hose

Make sure you have vacuum from the engine,
coming from the ported vacuum under carb

the '65/'66 C4, was known as the "Green Dot" C4 & has a different shift pattern to the '67/later C4's.

So your C4 tranny is the green dot which is an UPGRADED option. A better tranny better gears and stronger parts and what not, there was also the white dot tranny that was the cheaper or less performance transmission. As far as i understand the white dot was available for better fuel consumption HAHAHA which no one really cared about in 66 anyways.

In '65/'66 it was something like this:
P - Park
R - Reverse
N - Nuetral
White Dot - Starts in 2nd, automatically shifts to 3rd
Green Dot - Starts in 1st, automatically shifts to 2nd and 3rd

You have to drop the pan and inside is a bolt and roll pin that hold the selector rod in. You have to remove it and the rod will slide right out so you can replace the seal.

Readjust the band, I have ran into this same problem with another C-4.Found the reverse spool valve was sticking in the valve body. Hopes this helps.

Try adjusting the air-feul mixture or just turn the idle up a little bit. For either of these there would be a screw adjustment near carb

mercon 3

Vin Number on car drivers side on dash call dealer or do a search on vin #

Top is a C4, bottom is C6.

Sounds like crappy gas. The 289 may not like pump no-lead and the rattling sound you are hearing may be pinging / knocking.