When my M103 engine overheated on a 108 degree day last summer. I pulled the dip stick and it looked fine. I had to put the car aside because I was headed on a three week European trip. I finally got back to it, to tear it apart. When I did, I pulled the drain plug and got chocolate milk out of it.
My initial thought was a blown head gasket. What it really turned out to be was the aluminum head corroded through. The machine shop welded it up and it was like new. I should have paid more attention to the coolant.
These engines rebuild very well, so you should be able to get by this problem and be very happy with it again.
Most likely the problem is head related. A third opinion would not hurt.
It is possible for ATF to get into the coolant, I don't know if it is something that ever happens to these cars. I'm a manual transmission person and have no experience with such problems on an MB.
Best of luck,