I believe the 'S' is for Sportiv and "L" translates into hill descent, but I need to look at the manual for the 300SD to be sure.
The 'S' locks 4th out of the transmission and 'L' gives you only 1st and 2nd
I would routinely run the SD in 'S' in town as it kept the engine in boost on the local roads... I would also use 'L' when making a point at a stop light
I have not played with the SDL's transmission yet as I am going to do a drain, flush and fill with synthetic soon.
Hey for what its worth, I believe that the 722 4spd is the original Hydromatic transmission developed back in the 1940's by Oldsmobile and sold to DB in the late 1950's for a transmission design that is almost sixty years old, they work amazingly well!
To adjust the shift points loosen the bowden cable to make the trans shift at a higher RPM, tighten to make it shift at a lower RPM
If there are kickdown switch issues, try lifting the carpet and making sure thet switch is clean and that the wires are not worn. I had to replace the wire from the switch because it was blowing the fuse when I pressed the button on the SD. Very annoying as it also cut power to the monovalve causing full heat
Oh yeah, 4th is not really a 'gear' it is direct drive through both planetary gear sets. That is why it is a 1:1 ratio. None of these came with an overdrive, which would be a ratio of say .83:1...
There was a great article in Hemming's Classic Cars about the original Hydromatic with exploded drawings and flow charts of the various functions. It is quite an engineering feat to have developed this, especially when you look at the rest of the auromatic offerings like the Chrysler Fluid Drive semi auto and the Buick Dynaflow...
Hope this helps!