AT transmission woes

[hitbyastick]

Hi,
ever since I got my mercedes 8 months ago, it shifts really hard into 2nd and 3rd, but fine into 4th gear. I was under there just now. There's a wire coming out of the Modulator valve, that isn't connected to anything. What does that do? There's also another black wire running from one side of the transmission to the other, and it's not connected either, as in it broke. Another thing I noticed is that with the car off and the tranny in park. I can still move the driveshaft a good quarter inch. Is that normal?
Thanks guys