Third gear is clutch pack K1. From the way you describe the fluid, I would say its time for a rebuild.
MB sells those trannies rebuilt for somewhere around $1800. Its hard to get a shop to go this way as the rebuilt trannies have a very slim discount. If you don't have a local specialist and are up for the exchange, buying from MB might be a solution. Its also hard to get a MB dealer to do the job for the price of the tranny and 6 hours of labor. I have heard of dealer prices from $2500 to $4000.
A good independent with MB experience should be able to do the job for less than 2k if your unit is rebuildable. We usually do it for around $1600: rebuilt, installed and adjusted.
Bosch Master, ASE Master, L1
33 years MB technician