The clicking was probably the B3 (reverse) piston impacting the K1 clutch carrier. As Mr. Poole described, thin clutch discs allow the B3 piston to much travel. The clicking is most pronounced when the piston first starts to make contact. This is because there are casting tabs on the piston. (see picture) Once these tabs have been completely worn away, the contact is still there but you won't notice it as much.

Everytime you select reverse, you are adding some ground up metal to your transmission fluid. It might go another 100K miles, or it could trash itself tomorrow. If it trashes itself, it could very well be catastrophic rendering the tranny unrebuildable.

So the question is "do you feel lucky"?

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1994 E320 Wagon, 230,000 miles
1995 E320 Sedan, 106,000 miles
1994 E500 Sedan, 79,000 miles