1980 300CD transmission problems

[jpauld]

I bought a 1980CD several weeks ago with 250K miles. The car had all factory scheduled maintenance through 125K. (I haven't yet sorted out all the other service records I have) Car shifted great on test drive and on drive home (several days later).

I then took it to a local european engine shop for a once over. The fellows there seemed honest and straightforward and after checking the car over including a compression check (385-400 on all five) recommended a modest amount of repairs: rear brakes, exhaust hangers, new fuel lines (because I want to run biodiesel) and a "transmission service" because the fluid looked old and discolored. The transmission service included: drain the fluid, check the pan for debris, change the filter and replace the fluid.

When I picked up the car and drove home via the grocery store - 15 miles- I noticed that the transmission seemed to be "slipping" a bit when shifting especially between 2nd and 3rd and also if I kicked down the throttle. I took the car back to the shop the next day and they checked the fluid level - said it was OK and asked to have the car for the day. They could not offer any explanation but after "talking to their transmission guy" adjusted the modulator by "two clicks." I cannot tell if the two clicks made any difference but the tranny still "slips" or "flares" as described above.

I then took the car to a transmission shop where the guy who owned the shop told me that he used to work for MB, owns a MB and knew how to do the complex adjustments.

He called me a few hours later and told me the transmission is "tired out" that he could not improve it with adjustments and that a rebuild or remanufactured would cost me at least $2,500-$3,000 for parts and labor. He then told me that often changing old transmission fluid results in immediate damage to seals and such because of the higher acidity of the new fluid and that he wasn't going to charge me because his diagnosis was based on a quick test drive. Lame.

Also, I have been reading a bunch of threads about vacuum issues so I will throw in the tidbits that the climate control doesn't work except to blow hot air on defrost (hi, lo and bilevel seem to provide hot air but I haven't really spent much time with them on due to summertime temps) and the passenger door lock opens when driver's door lock opens but does not close when driver's lock closes - I have to manually lock passenger door.

Questions:
1. Can changing old fluid to new cause instant damage? Sounds fishy to me.
2. Vacuum Problem?
3. Kickdown switch?
4. Modulator?
5. CC and door lock related to the tranny problem?

FYI: I paid $2,500 for car and drive about 60 miles/week so I am not all that motivated to drop another $2,500 for a new tranny.

Thanks for any/all advice, tips or suggestions. If you folks think it is vacuum related any suggestions on where to start looking for leaks etc would be great. I will go get a vacuum gauge and start sleuthing. I have a moderate amount of experience with gas engines but zip with diesel & MB.

Paul