My 220D shifted like that when I first got it -- no hill climbing ability at all!
I have a new project, too -- bought a 1972 280 SE 4.5 for $50, would be driving it if the PO hadn't left water in it after he decided not to replace the water pump. Runs great, now that I got the fuel pump turning, even on the residual dead gas I couldn't get out of the system and one gallon of clean fuel! Unfortunately, the block is split down the valley on both sides, water runs out as fast as I can pour it in! Heats up like crazy, but I can spin the tires on dry pavement!
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!