Try this first...
I had similar problems on my 86 300E. The transmission was flaring badly. First I would check the fluid level. Do it correctly...on a flat surface & car running. It may be as simple as a low fluid level.
If the fluid level is o.k. then try to change the transmission filter. From what I've read on this forum, this will usually clear the problem up. If it doesn't then you'll have to search for other possible causes ie. modulator, etc. If you can't find any, then you may have "bite the bullet" & have the transmission rebuilt.
In my case, I did all of the above. It bought me some time, but eventually transmission had to be rebuilt.
Good luck,
jrmd01@yahoo.com