W124 Transmission - downshifting & not upshifting
 

This weekend we purchased our 3rd Mercedes, an '87 300TE. The appeared to be in excellent mechanical condition. The engine is absolutely quiet - all fluids were clean and smelled as they should.

The car drove fine on the test drive and about 10 miles after that. Then it started downshifting on it's own into 3rd or 2nd and seemed to get stuck in the lower gear once it did it.

After driving the 25 miles home at 45mph we made it home.

I then took it for a drive and if I was easy on the throttle it would shift ok for awhile - maybe 10 minutes before it started acting up again. Occasionally putting it in Neutral and then back down into D would get it to go into 3rd or 4th, but not always and not for long.

I checked and disconnected the kickdown switch, thinking it was stuck but that didn't help.

It seems like it could be a governor issue, as I've read they are prone to having a plastic gear break - but I'm uncertain if that would cause intermittent issues like this.

Any ideas? The trans fluid doesn't smell burnt at all.