It looks like a 2-3 transmission overload protection relay. There was a good post somewhere on this forum where someone actually pulled one out and replaced it, but I can't find it now. I talked to my tech about how to get a big socket around that nut holding it in place and he said that it is easier to hit the edge of the nut with an air chisel to get it loosened, because of the lack of space between the transmission and the tunnel.

I'm not sure if all the cars have this or just the V-8's.

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