The car in question is my 1980 300sd with a 722.120 transmission. When I bought the car three years ago I noticed right away I had a jump shift condition. The car would go from 2nd straight to 4th. This was most noticable at 3000 or above rpms. I changed fluid using redline synthetic fluid, put in a new modulator in and set it at 41 psi. I also tweaked a few of the other vacuum adjustments. The condition continued but I decided just to live with it. There hasn't been a problem until friday when going to work. As I turned a corner, it refused to go from 4th gear into third. When I slowed down for another corner I heard a big clunk and then grinding. As I nursed the car toward a local parking lot the downshifts were horrible and the grinding continued. I pulled into the parking lot and checked the fluid which seemed ok. The grinding noise continued even with the car in park. I called a tow truck and had it towed to a independent mercedes shop. They told me they didn't think it was the transmission but a failed differential or carrier bearing. They were going pull the differential cover off at cost of $123.00 to see if that was the problem. That was the last I heard from them until monday. What do you guys think?