OK, I will try to answer all of the quesitons:

Was going about 60 mph and shift level went into 2nd gear briefly, maybe 5 seconds
Car became unusually quiet briefly and was returned to Drive
Afterwar, car was a little sluggish above 60 mph
All symptons were new after the event and, over several weeks, performance has continually gotten worse to the point where I cannot go over about 45 when warmed up and will accelerate very slowly and sounds like it is missing when starting from a complete stop. Car surges with full power coming on and off.
Yes, it is a diesel (I think all E300s are diesels)
I don't know if the check engine light is on but will check that later today.