car wont move and wont rev above 3k

i have a 97 m3 automatic. the car wont move when i shift it into gear forward or reverse. also the engine wont rev over about 3k as if something is holding it back . if my trans is bad could it be keeping the motor from revving freely?

i just bought this car as a mechanics special without knowledge of what led up to its current condition.
i am just looking for some advise as to where to start. my initial feeling is that the transmission is bad and holding the engine from spinning freely yet not engaging into gear. i do feel the trans doing something when i shift from gear to gear but not the feel of the clunk of the trans trying to turn the driveshaft. i havent even gotten under the car yet but could a bad guibo cause this if it came apart? i guess i wouldnt hear of feel the clunk of gear engaging but would that be able to hold the engine from revving?

thanks in advance

Does the engine revs up in neutral? Have you checked compressions?