I have a 84 500SEL. I shifting was not smooth so I decided to change the fluid and filter after checking level. Only 4 guarts of fluid drained from transmission. Replaced filter and was only able to add 4 guarts which indicated it was full. Could there be blockage?

The blockage is the torque converter drain plug you probably didn't remove Spin the engine until you see a plug through the grating at the bottom of the bell housing. You should get another 4 quarts to drain. Spin the engine only in the direction it normally turns.

Sixto
95 S420
87 300SDL

Thanks Sixto