I know the transmission on my 420SEL has a front seal leak, but I'm trying to determine if it's bad enough to warrant pulling the engine and trans in order to replace it, or if I should just keep topping off the fluid.

The transmission shifts nicely. I serviced it about a month ago, and found virtually no material from the discs or steels in the bottom of the pan when I did so. Of course I topped off the ATF at that time. Today I checked the fluid level. I went through the whole drill: warmed the car up, ran it through the gears while parked, and put it in "Park" before checking the fluid level. The dipstick showed no fluid at all, so I figured it had a pretty bad leak and would take at least a quart. But when I added a quart of ATF and checked it again, the level was quite a bit over the "full" mark on the dipstick.

What could account for this? Am I doing something wrong?

Thanks in advance.