That diagram is pretty simple. Switches are normally closed in the transmission, for each gear. When that spefific gear is in, the switch opens, and that signal is sent to the ecm, so the ecm knows what gear its in.
Basically, you need to determine whether the switches in the transaxle are defective, the wiring is bad, or if its an ECM problem, and that diagram is just perfect for showing ya.
Read it a couple times, it should come to ya, like a puzzle. If you still don't understand, let us know spefifically, and we'll try to help ya out as much as we can.