With a 1998 ISC is it a electronic one or the old mechanical injection pump?
How much boost are you getting in the other gears? What is the max that you've seen? It's not the waste gate as it opens when you have too much boost. I know in my 96 FL70 with a maunual tranny it's hard to see much boost in the lower gears as you are not putting enough work on the engine for it to think it needs any boost which is a function for RPMs. The higher the RPMs the more boost it will make if the throttle is all the way down. You can have high RPMs and 0 boost if you are barely on the throttle.
If it's a mechanical pump I'd check for a air leak on the line going to the back of the pump.
If it's an electroinic system, I'd have the codes read to see if the computer knows what's wrong.
*Having thought about this some more, if the the torque converter is locking up (should be unlocked) in 1st (and 2nd) this could explain your problem. My Aladin system tells me things like this so about the only way to check is to have someone with a computer hook up while you drive it. This also assumes it's an electronic ISC.