OMG! Reverse Failure in W124 >
 

My 1994 E320 wagon with only 105k miles has bitten me again. This is the same car I spent nearly $5k on last year when the water pump failed, taking out the head gasket and wiring harness and requiring a complete rebuild of the head. Now reverse gear engages fine but only moves the car on level ground - any sort of hill at all and the car cannot climb it in reverse. Forward gears all work fine. Am i correct in thinking that at least the tranny has to come out and have the reverse clutch pack replaced? What else might need to be done? Or am I too pessimistic? I swear this car is cursed - I never had so many problems with my other two W124 wagons (both 1991s). At 75k the fluid and filter on the tranny was changed. Trying to be a good owner, but my car is not respecting me back!

OMG! Reverse Failure in W124 >
 

Your transmission fluid level is good, right? Never had this problem with a Merc, but I've experienced low fluid in another car and reverse would kind of slip. Good luck!

Yes you are correct.
Best guess is that your pump is fine : all other gears work. and reverse works on flat ground.
ANd valve body seems fine : reverse engages on time and all other gears work fine.
Sound like clutch pack is worn out pretty bad. -bummer man

The 91 with the 103 engine was/is more reliable than the 94 with the 104.