Pete...sorry...I looked at your post again. In 1982, you should have the 6-bolt pan. Turn the modulator screw in (clockwise) 1 full turn and then drive the car again.

You said you went from a slight flare when cold to almost nothing hot??? Sounds like control pressure.

Tymbrymi:

When the servo seal fails on a 722.120, it shifts normally into 3rd, but when it comes time to shift into 4th, it just feels like you started dragging the brakes. There really isn't a 4th speed shift at all.

I have felt what you are describing once and it was a worn center support bearing. The rubber was gone and the driveline was banging just after the shift.

I think adjusting the modulator will improve the shifts greatly on your car...Bert