My 88 300E automatic will surge from 1000 to 1400 rpm and back again a couple of times if I take my foot off the gas and coast under 40 mph. Only in gear, if I put it in neutral and coast, idle is normal, under 1000 rpm and stays there. A/C on or off makes no difference. IAC is not the issue as I have replaced it with a manual valve.

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1988 300E