Fastcougar will be able to verify this, since he has a factory CD4E Manual (yeah I am enviuse!), but here is what I know...
The clutch system that is stuck in the OFF position is a hydraulic soleniod that controls torque converter lock-up. Basically, it controls a check ball in the valve body that either allows fluid to flow to the torque converter at an increased pressure to lock it (this is the on position) or block the path of the fluid and divert it back into other areas of the tranny. I would have to check the oil schmatic to find out where. Check this
parts list that I put together, using the CD4E blow-up from fordpartsonline, and find item 24. That's it!
To be honest it is better that it is stuck off then on. If it was stuck in the on position, the car would not stay cranked!! Stumble horribly at best!!
As for having to pull the tranny to replace it... I am not sure and it seems that fastcougar will be able to fill us in on this area a lot more then I can, but it seem like it could be done.
Mine is bad too. I am carring around a P0743 CEL with me. This is an eletrical system problem with this circuit. As for price...
www.fordpartsonline.com has them for $130 I think.
Sorry, but I don't think a Haynes manual will tell you much about your tranny.

Really best to get a Ford CD. I think "tordas" sells them pretty cheap. Check the classifieds, I know there are two people selling them. Tordas just comes to mind right now becasue I have been meaning to get one from him for several weeks now.
Not meaning to whore my site or anything, but I also have a good deal of information links on my
links page that point to technical articles and other sites that have a wealth of info on our beloved CD4E.