* My experience has been the same as several critics in this thread of the 4matic. Early 90's 124TE transfer cases leaked internally and couldn't be repaired.
* The transfer case, which lives on the back of the automatic transmission has ATF in part of it and hydraulic fluid in part of it, and the fluids aren't supposed to mix. The problem I encountered with the transfer case was that the hydraulic fluid would find it's way into the ATF and eventually onto the ground (out the breather when the case was full; i.e., you keep adding hydraulic fluid to the reservoir and don't see where it's going, yet). The transfer case had to be replaced with a redesigned unit since seals and gaskets wouldn't cure the old one. I was told that by '92 or '93 all the 4matic 124TEs had the newer design transfer case
* Then the electronics would occationally engage the 4matic when there was no wheel slippage. A surprise on a dry highway!

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