Unfortunately, reverse is what usually goes out first on these transmissions. Although your miles total is pretty low. My reverse (722.3 transmission, in a 1991 420SEL) went out at 167,000 miles. For several months the early symptom was that it was taking longer and longer (up to seconds) for reverse to engage. Then it would do it when cold, but not engage at all when hot, unless I "blipped" the gas a bunch of times. Then it wouldn't even engage when cold.

To verify that a modulator adjustment won't help, you can try temporarily removing the vacuum line at the modulator end (and plugging the dangling line with a golf tee, or small pencil). With the vacuum line disconnected all of your shifts should be super crisp/firm/hard. But, you are likely to see no change in the engagement of reverse.

In older 722 transmissions (.0, .1, and .2), there was an externally-adjustable reverse band, which would have allowed a cheap fix. Unfortunately, the 722.3 and later 722 transmissions have a reverse clutch, instead of a band design. When this fails or wears out the only remedy is to remove and open up the transmission, and replace the B3 clutch. Depending on how long you plan on owning the car, and how the rest of the tranny looks inside, you can then decide on either just repairing the B3 clutch (and putting in new seals while at it), or going for a full-scale rebuild. In my case, at generally-high SF Bay Area prices, the cost estimate was $1300 for the B3 repair, versus $2,600 for a rebuild. The third option is to just get a replacement (remanufactured) transmission. But that route sort of precludes the opening up of the old transmission, without incurring some degree of "double expense". The prices I quoted above were at an independent transmission shop that had a local reputation for good expertise (including rebuilding, and not just replacing), and honesty. After removing and opening my tranny, the head mechanic told me that the rest of it (except reverse) looked pretty good, even at 167,000 miles, and therefore he saw no compelling reason to do more than the B3 repair. I now have 182,000 miles, with no further problems.