that looks just like foamed ATF to me - is your pickup tube going all the way down into the pan? was the level overfilled leading to foaming - foam does not transfer through the tranny as well as fluid does, hence the harsh shifting. you need to look into why it is foaming and correct that and your problem should go away.

changing the filter might help if it was really dirty and not flowing well.

John in San Antonio

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John Hughes, was in Landstuhl, Germany but currently in San Antonio, TX


1978 280CE Astral Silver now 59,xxx miles and counting "Silber-Kugel"
1986 300E Black Pearl Metallic 143,xxx miles 5-spd daily driver w/ blk leather "Schwarz-Schönheit"
1989 190E 2.6 (euro) 5-spd Desert Taupe 112,xxx kms Had to leave behind in Germany!!! "Helga"
1983 300D Pastel Beige now 312,xxx + miles SOLD

OBK#24