100%

Yes, the fluid is within the fill marks, and the transmission was cycled through the gears to ensure a correct fluid level. Then yes the next thing in my diagnosing will be to run a pressure gauge and vacuum gauge into the car and see what my readings are while driving down the road and while going through the gears. I get the feeling with the way the car drives in 3rd that there is a pressure loss or restriction in the valve body from the water and that's why 3rd gear is so weak. What size thread is the port for the pressure on the side of the transmission?

That is covered in the PDF I linked with great detail.
Besides, why do you insist on using the old valve body?

@filp I want to replace the valve body however I want to verify that the valve body is the problem before I go through all the work to replace it. Once I do some more investigation I will post my findings. While I'm in the process of doing that could someone send me a vacuum diagram for the 1985 300sd, so I can trace down more vacuum leaks after im done with the transmission issues? Also thanks for the service info and links so far!

Are you serious? It's like 12-15 bolts, nothing else to it. Instead, you'll have to drop the pan again to do it and later refill with fluid. Unless it's a completely different valve body.
Regardless, shortcuts here will not pay off.

@filp Yes, the valve body is easy to remove as I have removed one from a junkyard vehicle for a 722.3, I guess I will change it and update everyone as to what happens, and if nothing changes then I need to do further diagnostic.

Ok, it's been over a month now and I've been busy with lots of other projects around the house but was finally able to swap the valve body and that solved the problem. I swapped the valve body with a good one from the junkyard and filtered the ATF in a paint filter then dumped it back into the trans and ran the car through the gears and every gear engaged quickly and firm so I was happy to feel that while it was on jack stands. Did a road test this morning and everything felt great, good pickup, good downshifts, and fourth gear kicked in when I let off the accelerator at 50mph and I cruised for a quarter-mile in my neighborhood on the straightaway. However there is a flare between the 2nd to 3rd upshift and if I let off the accelerator it shifts right into 3rd and I keep driving, that can probably be adjusted with the bowden cable. But if the bowden cable doesn't fix it I have a spare k1 and k2 spring kit on the shelf so no biggie to drop the pan and replace those springs. I still had more than enough vacuum going to the trans (17HG of mercury at idle and it bled off proportionally to engine rpm) Compared to before the ATF is now dark red and not Pepto Bismol pink so I'm sure most of the water is out of the transmission now, but we are going to drop the pan and change the filter for the final time and fill with new fluid. Another thing that was concerning was the amount of junk in the bottom of the pan and on the back of the filter, it was a black layer I could swab up with my finger but there were no metallic particles whatsoever in the buildup. I think it's some clutch material but I also feel it's just leftover gunk that was in the transmission from sitting for a year and a half but the interesting part is that the transmission pulls strong in each gear and doesn't slip at all. So I'll keep my eyes peeled with the transmission fluid condition and the performance of the transmission and its shifting characteristics. I most definitely am one of the more lucky ones to get a transmission that had a massive amount of water in it come back to life so well, and it has certainly been a learning experience fixing an automatic transmission and troubleshooting it. I'll keep everyone updated as to what happens next!

I read thru the prior posts and didn’t see anything mentioning your radiator. I hope their isn’t a coolant leak from your radiator to the tranny cooler.

I guess you got that covered with your frequent fluid checks. If any water gets in the tranny you’ll spot it quick.

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79 300TD “Old Smokey” AKA “The Mistake” (SOLD)
82 240D stick shift 335k miles (SOLD)
82 300SD 300k miles
85 300D Turbodiesel 170k miles
97 C280 147k miles

@ykobayashi Yes the cooling system was fine and the radiator cooler never leaked before the transmission swap so I doubt that added any moisture to the ATF. But I still have to change the fluid and filter again so the fluid is perfect.

Thanks ASteele for letting us know that the cause of your no 4th gear problem was the valvebody.

This is all I've got.

Attached Thumbnails

 

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84 300SD
85 380SE
83 528e
95 318ic

Ok, so another great update for everyone recently me and my father did some more diagnosing and found that the transmission modulator pressure was way off and adjusted it accordingly. At hot idle the modulator pressure with the vacuum line disconnected was 30 psi and the engine was at 65C (we should have adjusted it at 80C but the engine doesn't get hotter than 65C at idle for some reason and it was idling for around 30 min in park, plenty of time to warm the tranny fluid up.) After adjusting the modulator pressure there was a difference in shifting quality and then we began adjusting the Bowden cable. Played around with different adjustments and read the factory service literature and took a good couple of days to get the Bowden cable close to perfect. The Bowden cable is not far from being screwed all the way in and the transmission shifts at all throttle positions without the driver having to let off the accelerator to make the transmission shift, the rough cut is done now so the fine-tuning adjustments are up next (quarter inch to eighth-inch rotations of the Bowden Cable)

Before I go any further though I have to replace the center carrier bearing as its very bad like really bad, so once that's done I can finish my adjustments and the car can be daily driven again and have all the bugs ironed out as well.

Something interesting to note is that after adjusting the modulator pressure to the proper spec the transmission shifts very smoothly into drive and reverse, you almost can't feel it. And after the adjustments, I have done the transmission pulls strong and shoots you back in the seat from take-off when you floor it, FYI didn't do that with my dad in the car lol