Give this a try
Greetings Koon Koon,
So that we are on the same page, is this car somewhat new to you, or has this problem just occurred out of nowhere?
The reason I am asking is that it seems I had a similar problem on my 300TD wagon, and am slowly correcting it while adjusting and fixing other non tranny related items. I know it sounds dumb or somewhat far fetched, but to start with, MB diesels start out in second gear unless you drop the shifter to it's lowest setting manually. Trust me, you only get about 10 mph out of first gear, then shifting to "s" you get second and third gear, and by 40 mph it's asking you to shift to fourth. After doing a linkage adjustment, it didn't change things at all so I lived with it until I started finding other things out of adjustment that would cause the engine to lag and not build up for the next shift. I replaced a leaking vacuum diaphragm on the vac pump, I reset the valve timing back to specs, and now I am in the process of getting my IP properly back into injection timing specs, and that has helped the most by suppling more power to the tranny to make it do the job correctly. Check the above items before assuming the tranny is gone, it's probably not. The part you describe as your replacement vac modulator from Benz, was it given to you from the chassis number of the vehicle or from the engine number found on the block? Just a thought that the engine had been changed out at one time, and a different year engine and tranny were reinstalled, thus the part would also be wrong for that year tranny.