The plastic bushing on the lever on the transmission is missing. The extra play at the transmission lever means you have to move the shift lever farther to get the tranny lever to "click" to the next position.
These are very inexpensive, but can be a little difficult to get in place with the car on the ground. I usually take the tranny lever off and put them in a vice, it saves a lot of time getting dirt in your eyes and pinching fingers with vice grips under the car.
There is also another similar bushing at the shifter end of the rod -- if this one is out, the shifter rattles along with being loose. This one you have to reach from inside, I think, through the console.
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!