I just finished rebuilding this transmission and got it on the road. I didn't have reverse before and now I do. I added fluid until it showed up between the lines while running on level ground.
Two symptoms are showing up:

(1) It does not shift out of first and seems to have a very high stall limit before it hooks up.
(2) There's pressure sensor to test the modulator pressure. The pressure is only 10 psi or less when idling and driving around. Only above 3500 RPM does it get any higher (24). It's supposed to be 35 psi or so when just idling.
I've heard maybe a stuck kickdown solenoid. Should I just disconnect lead wire to test? Any other possibilities?

Update : still searching for why it won't upshift beyond 1st. I did retest the modulator pressure with the vacuum source removed and it showed a healthy 35 psi. This is probably the correct way to test the modulator after all, now that I think of it.
The "Park" position also does not do anything, it just rolls freely even in park.
Next thing to do is maybe testing the kickdown solenoid with a 12v supply directly to see if it clicks or is stuck.
Then open up the rear cover to see if I forgot the parking pawl spring. I wonder if these two symptoms are anyhow related though? I see some talk about the governer can that get gummed up? I just took mine out and cleaned it with brake cleaner, then spayed with fogging oil and stuck it in a bag until assembly.

OK, I got the transmission functioning!
The no park issue happened because I misread the diagram and had installed a washer before putting on the parking pawl and this caused the pawl to bind up on the rear cover. The spring was installed correctly. I removed the washer and got park to work again. I tested the kickdown solenoid and it was functioning fine (took out and applied 12 volts and watched end needle move in and out).

I looked up the proper modulator pressure and 35 psi is not healthy - depending on the transmission, it should be 46 - 55 psi. So I checked the working pressure (line pressure) on the port on the other side and it was way low (like only 50 - 75 psi). After some researching it appeared low working pressure was due to either misassembled valve body or a bad front pump.

I suspected that a check ball was out of place due to the difficulty I had of holding the two halves of the valve body together and flipping over to put the screws in. Sure enough, when I opened up the valve body, the check ball that sits atop the pyramid-shaped spring was floating around on the wrong side of the valve plate. I also checked the valves and one was assembled the
wrong way (compared to a similar junk-yard valve body side-by-side).

I checked and recleaned every valve and accumulator and both halves and everything else appeared to look good.

When time came to put it all together , I put the two halves together on an upside-down wire basket on the edge of a table and screwed them together from underneath. This saved me from having to flip the two halves over while holding it and hoping that nothing misaligned.

After installing back in the car and refilling ATF to correct level, I checked working pressure and it was much higher than before. I took it out and I have all my gears back!

I'm not totally out of the woods yet, though. When driving, and with the vacuum line attached, the 1-2 shift seems slippy/soft. I had installed a new vacuum modulator box. and the modulator pressure is about 55 psi at 30 mph (with vac disconnected). I'm not sure what this model's (722.357) modulator pressure should be. This is a Japanese market 300D with OM603 (1991 model year). It has a blue vacuum modulator box. There's a table with the correct modulator pressures for each model of transmission, but the 722.357 model (and any mention of blue colored boxes) is missing.
On another thread someone asked the same thing and I think they determined 3.2 bar (46 psi) was correct - no documentation to back that up though.
Now, my 1-2 shift seems soft/slippy with the vacuum connected, but when disconnected it seems to hang at high rpm and then shifts hard (tweaks the tires). If I lowered the pressure to 46 psi, I'm worried it would be even softer. Maybe it's just the new clutche disks just have to break in more? Or possibly, I have an incorrect spring somewhere inside.

I'll adjust it to 46 psi and report back if anything changed.

The 2-3 and 3-4 are crisp , though they happen after hanging out at higher rpm. I'll loosen the new bowden cable and see if that helps any with those.

Subscribed .

__________________
-Nate
1982 240D 408,XXX miles
Ignorance is the mother of suspicion and fear is the father

I did then what I knew how to do ~ now that I know better I do better