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The solenoid is in the transmission, It blocks the shift.
Here are some pics:
There are two devices screwed into the trans. The bottom is the temp sender, The one higher, on the drivers side is the CAGS solenoid. Just disconnect the plug, install the CAGS eliminator and plug the other side into the harness. They come in one and two pieces. The part that plugs back in the solenoid just keeps out dirt. The one that plugs into the harness has a resistor that fools the computer to thinking it energized the solenoid!
There is a tab cast on the trans that can be used with a wire tie to hold all the wires away from the exhaust pipe.
This pic from the service makes it clearer as to where it's located
Although it doesn't hurt anything, I still don't understand why anyone bothers with it on the C7 M7. The forced 1-4 shift only occurs between 14-18 mph. Shift 1-2 before 14 or after 18 and you will never see it.
The dealer said I would hardly ever notice it too. But somehow my driving style always seems to find the sweet spot and I'm getting annoyed. First mod on my C6 was the CAGS eliminator, so it's looking like that will be the first mod on my C7 too.
It's not likely that a dealer would do it, unless you can talk a rogue mechanic into it behind dealer management's back. However, any shade tree mechanic can do it. It simple.
A dealer could find themselves sideways with GM if they did that, since it's not the way the car was certified w/ the EPA for the purpose of GM's CAFE requirement If an owner does it, it's not their problem.
The reason CAGS was installed on the car in the first place was to play games w/ the EPA mileage certification test, in order to produce a higher city mileage rating. When tested, the car is purposely shifted out of first between 14-18 mph, so that the 1-4 shift is forced. If driven that way all the time, the car gets better city gas mileage, and the C7 LT1 cars avoided the gas guzzler tax as a result.