I just figured out the transmission flaring issue on my 80 300cd. It's a 722.118 '4 bolt' transmission, which is influenced by a vacuum modulator & vacuum control valve.

After confirming the trans fluid wasn't low, I used a Harbor Freight oil pressure tester kit to set the mod. pressure to the factory reading. The modulator pressure port bolt is M8 * 1.0, some people grab junkyard banjo bolts but buying the kit is easy.

The car would bang into gear with VCV disconnected, so fortunately the flaring wasn't internal (not that a 150k mile 33 year old transmission couldn't use a rebuild anyway.) With the VCV set to 10" at idle from 15", shifting is now on-time and crisp. Add a new transmission filter, cooler hoses & 6qt fluid change, and it's good to go!

Useful information is out there on MB transmissions, but nothing like a cohesive idiot-proof writeup... you'll have to sift through about 20 pages of intense discussion on vacuum orfices.