Compressed air in the hydraulic servos will do funny stuff on an auto tranny. Fluid check is the first thing I'd check.

It's possible the tranny is shot, but I'd verify that the fluid and filter are good before worrying about a bad tranny.

Peter

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1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!