Yes, low fluid will cause it to fail to move as there is nothing in the torque converter and nothing to apply the cluthes -- goes to neutral.

Most likely you have a slow leak, and will need to learn to check the fluid level frequently until you decide to cough up for the re-seal. Leak is usually the front seal, between torque converter and transmission, and requires transmission removal to fix. You may be lucky and only have a pan leak or servo leak that can be fixed with the tranny in place.

Rebuild tranny is around $1500, removal and installation will be more, exact amount dependent upon what the shop charges. I'd advise against having a tranny shop do the rebuild unless they do lots of them on MB 722.x trannies -- these are NOT typical American transmissions, and the typical American transmission rebuild will not make you happy.

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!