what happens if the transmission is overfilled
 

i would like to know the most obvious symptoms of overfilling the transmission and also what could happen to the car if it is not corrected

Will affect shift quality, MB even said of the 722.6 transmission, earlier on in production, that the first thing to do when there is a complaint about shift quality is to check the transmission oil level and to make sure it is not OVER filled. They said NOT to underfill on purpose, just make sure it is not OVER.
On the older, vented transmissions, if too overfilled it will puke out the vent on top and make a helluva mess.
Gilly

Ok, I just found out the hard way that its not overfilled. My tranny fluid is leaking just as fast as i pour it in....like the drain plug is out. I just poured some in and kneeled down to watch it all run out! its coming from the the part where the gasket meets the body (not between the pan and the transmission, but the opposite side). I just replaced the gasket and filter about 1 month ago! I went under last night and tried tightening it....I was out from 8:30 pm until 4:00 am because it would keep leaking from above the gasket like i wasnt tightening it enough. I was afraid of applying too much torque, but I did get it really tight. any suggestions please? it always happens on a friday when nothing is open the next day.

Depending on just how much the transmission is overfilled, it may be no problem at all. Otherwise, the most common problem will be fluid leaking out the vent. Shift quality can be affected, especially if the fluid level is high enough to get aerated by the moving geartrain parts. This can cause damage if the transmission starts slipping and the fluid level is not corrected soon enough.

uneven tightening may also cause that gasket to leak... you may have inadvertently crushed that side of the gasket to oblivion... maybe a new gasket is in order? IF its leaking at the gasket

thanks. yes, the pan was warped and the gasket is now torn so I ordered new ones. the issue was putting the pan on unevenly.