Not sure about the '85, but on my car, there is a pressure line from the back of the intake manifold to the switchover valve. Then there is another line that goes from the switchover valve to the fuel injection pump. If that line is not connected properly, the pump does not get the signal to add more fuel as the turbo spools up and creates boost. I had this problem once, the boost gauge showed plenty of boost, but the car was acting like a 240D (no offense
) turned out the line from the switchover valve to the pump was disconnected. While this won't explain your tranny problems, it does show a relationship between the switchover valve and turbo performance.