HERSHEY,
I had these same problems with my 91 124 300D. Trans would not shift. It was the plastic governor drive gear. The gear was less than $5 at the dealer. However before you take the governor out, unhook the kick down wire at the right rear of the trans and give it a try. The other thing you mentioned the car wouldn't go in reverse. Did you mean the car would not move in reverse or that the shifter would not go in reverse? The reason I ask is the governor can also lock out reverse and the stick will not go into that gear. In other words, if you are moving down the road you can not put the trans in reverse by accident.

Paul

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84 500 SEL (307,xxx miles)