I had a similar situation on the '72 107 chassis SL when I bought it. In a test drive with a local AT shop owner, he noted that the slipping was BETWEEN gears (i.e., during shifting), and that there was no slipping once the trans was in a gear (1st, 2nd, or 3rd). That, he said, was a good sign as slipping while in a gear would be an expensive bands/clutch problem.

He said replacement of the external modulator should correct the between gears slipping, so I bought a new one (about $40) but never got around to installing it so I can't vouch for the efficacy of that repair. Worth considering, though.