The part you described is the kickdown solenoid, the wire is the kickdown lead and runs to the switch under the accelerator. The bolt holding the solenoid in place should be torqued to 14 ft/lbs (I think, working from memory here). There is a sealing washer between the solenoid and trans body.
Might try re-torquing it, especially if any tranny work had been done to it.
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Mike Tangas
'73 280SEL 4.5 (9/72)- RIP
Only 8,173 units built from 5/71 thru 11/72
'02 CLK320 Cabriolet - wifey's mid-life crisis
2012 VW Jetta Sportwagon TDI...at least its a diesel
Non illegitemae carborundum.
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