My 95 E 420 with 46,000 miles is not downshifting from 4th to 3rd when slowing to go around a corner, or for traffic. After slowing down, to 15-20 mph and then accelerating normally the trans downshifts harshly with a clunk. If I downshift manually, it drops into third smoothly and I can accelerate normally, and then manually shift up to 4th. When stopping completely the trans downshifts through all gears normally and starts out in 2nd. TYIA for any ideas.

Are you flooring the pedal? Will it downshift if you floor it into KICKDOWN?

The 1994 cars have an automatic adjusting band piston on "B"1 band. Many times this piston won't hold its position & then has to re-adjust itself. THAT can cause both of your problems.