The K1 is in the valve body. Easily accessible with everything still mounted in the car. There are tons of threads on the subject on this forum alone. I used the OEM parts, something like $8 for the kit.

Mine still shifts fairly harsh in all gears when the transmission is cold, but after ~5 mins of runtime, it smooths right out. I attribute it to wear in the transmission and being "grabby" until the fluid heats and thins out.

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Current stable:
1995 E320 149K (Nancy)
1983 500SL 120K (SLoL)

Black Sheep:
1985 524TD 167K (TotalDumpster™)

Gone but not forgotten:
1986 300SDL (RIP)
1991 350SD
1991 560SEL
1990 560SEL
1986 500SEL Euro (Rusted to nothing at 47K!)