Hey, im having problems with the auto tranny in my 1983 300D turbo with 277k miles.

I will start off fine in 1st, shift to 2nd no problems.. but then when it tries to shift to 3rd, it free revs. it will free rev until i slow down and it shifts back to 1st. When its free-reving, if I continue to give it throttle and bring the rpms up to 3k or so it will shift back down to either 1st or 2nd gear too

Ive checked the kickdown switch in the carpet under the throttle, and it seems to operate normally.. when pressed it is a short, otherwise its open. Ive tried unplugging it, same problem.
Ive tried unplugging the tranny vacuum line, same problem.
Ive tried adjusting the bowden cable, and can get it to shift through 1st-2nd slower or faster, but whenever it gets to 3rd, it freerevs and shifts down again.
Fluid level is good, color is good, smell is not burnt or anything.

I am running out of ideas, the next thing I was going to try was changing the fluid and filter, and if that doesnt work.. manual swap

Any help would be awesome thanks

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1983 300D Turbo

well i just finished changing the fluid and filter, and it does the same thing.. although it does not freerev as much, it will shift directly from 2nd back to 1st. and there was a lot of metal flakes and shavings in the pan, i think maybe a clutch pack is complteely gone.

looks to be in need of a transmission rebuild, unless there is something external to the transmission that would cause a shift to 1st instead of 3rd??