I was driving my 420 SEL and all of a sudden it downshifted and the transmission started making a squealing noise. I pulled it over and it has plenty of fluid but it was extremely hot. I drove the car home a mile from where I was and it made the squeal noise all the way home. It shifted, but it was like it was dragging. When I checked the fluid again it was extremely hot.

Any Ideas?

What was extremely hot? The fluid? How do you know this? Do you mean the engine was hot according to the gauge??

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Current cars:
2000 ML55 AMG, 174k miles
2003 C240 T-Modell, 202k miles
1995 S320, 207k Miles

The fluid was extremely hot, I pulled it over and checked to see if the fluid was low and see if that was the problem. Fluid level was slightly elevated and the fluid was almost smoking hot. Guess I'm glad I run sythetic in it.

well I drained the transmission fluid and dropped the pan, the fluid in the filter was black and it looked as though a portion was pulled up into the fluid intake for the tranny. There are some fine metallic particles in the fluid and in the bottom of pan. I believe the filter was clogged and that caused the fluid to heat up, and subequently the noise was caused by tolerances closing up with the heat.

I have drained the torque converter and changed the filter. I plan on driving the car for about 5 miles and then drop the pan again to to check for particles and change the fluid and filter again.

Any thoughts?