Bad News On My 300TE Transmission

[MCallahan]

Had my weekend planned out to replace the B1 and K1 valves in the valve body and give it a good general cleaning, due to a weak or non existent 1-2 shift. Start in drive, manually shift to 2nd and ease off the pedal a little and it hooks right up. Sometimes it shifts perfectly. Sometimes it just revs like mad between and then skips directly to 3rd. Even the factory manual says bad B1 valve in the body.

Found the torque converter drain, found the STRIPPED Allen head pan drain plug (vise grips). Got the pan off, got the filter loose and took it into the shop to see what was up. Not much of anything in the pan, fluid isn't badly burned or full of metal, but being the aviation type, I wanted a look in the filter, so I pried the crimped edge off with pliers and opened it up like an oyster. Ignorance is bliss and I shouldn't have looked inside. Pics below. (Well, no pics. Can't get them to upload. Pretty useless forum feature.)

At any rate, there is a small handful of fingernail and smaller sized pieces of what looks like paper gasket and one piece about an inch and a half long, but being these bits are radiused, I am guessing that's the lining of my B1 band. Now for the $2000 question that might save me a rebuild... Is a 4spd transmission out of a 93 300E sedan with the M104 the same as the one in this 300TE wagon? If so, I can probably make it work with the trans out of my parts car combined with the one in my wagon. If not, I'm in for a major rebuild, I guess.

I have no choice but to put it back together, so I'm going to go ahead and do the valve body work and drive it until I decide what to do.