I finally got around to taking in my '98 ML320 to be looked at. What broke the camel's back so to speak, was that the Check Engine Light came on. Total times that I had the upshift problem over the course of 4 months, was only 5 times.

The final bill from the dealer to fix the problem: $896.14

Here's what they found and did:

For the not shifting past 3rd gear:
"Check Transmission after repairs, shifting ok. intermittently has rough down shift. Would not condemn transmission at this time. Shifting OK.

Test drove and verified, trans slipping badly, goes into limp home mode. Staying in third gear. Fluid level very low. Added two quarts transmission fluid. Adapted values at limit. Readapted transmission after top off fluid. Checked for leaks. No leaks at all from transmission. Checked cooling system OK. Check at ETC UC for leak from wiring. ALL OK. "

Charge for above: $350

For the check engine light/hesitation on cold engine:
"Check DTC P0170, P0173, P0700. Check for Vacuum leaks, OK, Found HFM voltage 1.03 w/key off, adapted values of engine at max 1.32 Replaced defective air mass meter and readapt engine. Clear Codes"

Charge for above: $515.18

Total cost for repair: $896.14

A bit pricey, but I'm hoping this means I don't need a new transmission any time soon.

Anyone have an opinion on this?

Thanks,
Tim