awd, I can't imagine a situation where you'd get two speeds from a 3 speed wall but only on/off at chain. Unless you have some sort of 2 speed fan/switch set where speed is controlled only by wall, is it the original wall switch? Do you get the "only on-off" at chain with all wall settings?
The chain switch turns on one of three wires, each wire has a different resistance that only lets a certain amount of electricity go to mot.or, low the least amount, high the most, so fan runs at different speeds. Usually a 3 speed fan is set on high with chain, then wall switch controls speed. If chain is set on 2 then fan won't run even if wall says 3. if that was your problem, you wouldn't get just on-off. If your 3 was burned out at fan, you'd get off-low-medium-off-off-low by pulling chain. If medium is burned at fan you get off-low-off-high-off. If low is burned you get off-off-medium-high-off. Some fans work in reverse order first pull is high then on down.
Some wall switches work the same way, with 3 seperate (internal) wires, especially 3 position ones. If one of those speeds was shot and chain is on, you'd get the similar sequences as B4. When you set the shot speed fan would be off.
Some swiches are "additive", so to speak, On 1, electricity goes thru only one wire, at 2 thru two wires, 3 three wires. One of the wires could be shot, power only goes thru 2 wires, giving you only two speeds. You can't see the wires, they're inside.
Some fans use a rheostat, a switch that controls amount of electricity to one wire, usually these switches have a knob that turns or a slider with stops, giving you variable, unset speeds. I don't know if there are 3 position rheostat switches, there probably are. The higher "end" of a rheostat can stop working, The fan wiil work at all speeds up to the bad part and keep working but no faster.
Ya know what? By typing that i realized a situation where you could get different speeds from wall and only on-off at chain. You have a one speed fan controlled at the wall. You need a new wall control. Just a 1 2 3 type. Easy to install http://www.ehow.com/how_7556761_wire...an-switch.html
. All I would add to those instructions is to lokk on back of new switch where black wires come out, one should be labeled "Live", "hot" "power", the other one "load" "fan" "light" or similar. B4 disconnecting wires from old switch and see which wire from house is connected to "Live" and wrap a piece of tape around it so you can connect to proper lead in new one.
Dohhhhhhhh! Its late, my brain done up and left me for some other skull. I couldn't think it thru. Well, now you now how ceiling fan switches work. Next question I answer is " Why doesn't my fan and lights work? I'd write the power co. but only place I can find the address is on electric bill and I always throw those away unopened." I'll answer with long explanation of how electricity works.