... the answer is:

The car had been sitting for over a year. It looks like the ATF "drained back" into the trans.

Got the car running and then checked the AFT level-it needed 3 quarts.

When I first got it running the trans would not engage in reverse or any of the forward speeds. I started adding ATF and soon I got gears. Car is now running and shifting well.

So...

-no it wasn't overfilled, the ATF had simply drained into the trans (car was parked on a slightly sloping driveway)
-The car needed ATF
-The car shifts well after a final adding of fluid once warm

My friends think I am a hero. Nice.

Haasman

__________________
'03 E320 Wagon-Sold
'95 E320 Wagon-Went to Ex
'93 190E 2.6-Wrecked
'91 300E-Went to Ex
'65 911 Coupe (#302580)