2.5:

I agree with pmc on this. The stick from a 722.323 ('86 560 SEL/SEC) has hot low and high marks located at 1.125" & 1.75" respectively, from the bottom end, which is curled into a ring. Irrespective of the overall length (26.75" for the .323) I consider the distance of marks from the bottom end to be definitive, as the overall length will vary with the length of the tube, whereas the position of the bottom end of the stick is held constant.
If the hot fluid level is above the lower wavy section, as you state, the level is way too high.

What Frank said. To add to that, yes my stick looks like the one you pictured. The waves in the stick just keep the stick centered and keep it from rattling around in the tube. If you are at the bottom wave, you are WAY over full. Look at the bottom if the stick about 1.5 inches up and you should see 2 lines. These are the LOW and MAX levels when HOT. Cold level will be below the LOW line about .25 inches or so. Always check with the engine running and in PARK. The gear really doesn't make any difference, it's just that PARK is the safest one to use.

PaulM

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84 500 SEL (307,xxx miles)