My '99 E300D turbo had a couple odd shifts and had some flaring 1-2 regardless of mode.
I took it to my friend and excellent mechanic who has vastly more knowledge than I. He spotted a leak on the connector to the transmission and noticed it was the old style, which had been upgraded by the factory. He ordered the new connector and replaced gaskets and I supplied OE fluid of the correct type also noted it has a drain plug on the torque converter, now its fixed and shifts properly 1-2 no flaring!
Also the computer readout was flaky the first time he hooked it up and following the new connector it was solid.
Incidentally look for any signs of a coke or coffee having been spilt into the shift gate on the console, mine was not one of those death spirals that have been described as a result of liquids getting into the circuit board that is located just under there, its a bad design as its not sealed well.

Awesome car, I love the '99 turbodiesel! I hope you get yours fixed properly.

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'95 E320 Wagon my favorite road car. '99 E300D wolf in sheeps body, '87 300D Sportline suspension, '79 300TD w/ 617.952 engine at 367,750 and counting!