car has approximately 50,000 miles.

over the last 1,000 - 2,000, the tranny is upshifting hard, noticeably.

downshifting is even harsher. in fact, under heavy braking, the tranny downshifts so hard that it stalls the engine.

any ideas as to what is occurring? and why?

You have an electronic transmission. Was the transmission service done at 40,000 miles? like mercedes says. There is an electronic plug on the transmission leaks sometimes but it is to early for this car. This can cause something like this. Next go to a dealer or independant Mercedes garage (not independant who works on all other crap..BMW.AUDI.. ETC) Get a read out and see which code is coming up. The code gives a guide in which direction u have to go

If your car were in my shop and didn't have any current or stored fault codes, I would update the transmission and engine software and re-adapt the transmission. Of course, this would be after I checked to see if the adaptation data was in spec.