89 420SEL - clunky transmission and mis-fire ?

[SNBmerc]

198 420 SEL, 127k miles, second owner, dealer serviced up to 123k miles.
Car had a misfire when we bought it - 4 new plug wire connectors fixed that. Transmission was a bit clunky then, but not so bad that it made my wife suspicious of the car (she's had Merc's since driving age).
Later on 'check engine' light comes on, turns out to be code 12 (EGR temp sensorfault ?). Re-set CIS box and no more engine check indications since then (thanks, AJD).
Now, engine runs rough at idle - shorting No. 4 out makes no difference to idle. Shorting any of other's out produces markedly rougher idle. Plugs on Nos. 5 - 8 all look like they should, as do 2 & 3 but 1 looks a shade darker and 4 darker still. Wires and plugs all ok (as in new). Distributor cap has large crack running circumferentially and down to lower edge of cap from just under No. 6's contact post (about 1 1/2" long). It still accelerates well and runs on the road ok though. Ideas anyone ?

Transmission - clunks and jerks through some up-changes like a big clunky jerky thing clunking and jerking, and drops out of drive with a vengenance when coming to a stop. As in Not Smooth. Checking the fluid as per handbook - hot (80C) engine at idle - level appears to be well over top line, which I find odd for a car serviced at a local & reputable dealer. Comments anyone ? Do I need fear the Large Bill For Transmission Repairs Nightmare ........... ?