Symptoms are classic lack of vacuum to the modulator.

The 87 TD has a vacuum line to a device on the driver side of the IP. From there another vacuum line goes to a switchover valve and to a vacuum amplifier (blue saucer looking thing). From the blue saucer there's a line to the transmission modulator. So basically there's a hundred and one places that can leak.

If you don't have a vacuum gauge and have to be shown how to use one, your best bet is to see if any vacuum lines are loose, broken or not attached. It's common to knock the line to the transmission loose while replacing the oil filter. Check that there's no transmission fluid in the line that goes to the transmission. If all that checks out, get a second opinion from another reputable MB independent shop.

Sixto
93 300SD 3.0