If transmission fluid is leaking past the diaphragm (e,g., you see it run out the vacuum hose when you pull it off the modulator), then I think you will need to replace the modulator. On my car, a half-quart of transmission fluid had actually been sucked up the vacuum line and into the intake. If the diaphragm is leaking, then you're probably not getting an accurate vacuum signal to your transmission and it could affect your shifts. This may not be the problem in your case, but I thought I would point it out as a possible easy fix. Best of luck.

This came from a 722 repair manual:

Quote:

Transmission Slips During 2-3 Upshift Or Slips Initially, Then Grabs Hold Check modulating pressure and adjust (if necessary). Check for temperature throttle installation (if equipped). Valve body worn or damaged. Replace valve body (if necessary). Replace inner plates of clutch K-1 or recondition clutch (if necessary). Check front cover Teflon ring.

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1993 400E, 256,000 miles (totaled)
1994 E420, 200,000+ miles
1995 E420, 201,000 miles