I have a 1990 300TE 4matic wagon I purchased for a good price 6 months ago with 102,000 in immaculate condition, but no records. My local mechanic gave it the thumbs up. Had I found this forum before I bought the car, I probably wouldn't have...that said, I love this car, the handling combined with the four wheel drive is amazing. I had all the fluids flushed at the dealer when I was in Salt Lake about a month after buying the car. They found no major problems.

When I had my most recent oil change 2 weeks ago, my local mechanic found that my front differential fluid was burnt black. I had noticed that after driving over the Pass for the second day in a row the front end would jump while sitting at a stop light( problem goes away in neutral). mechanic thought I had overheated the front diff. possibly due to unmatched snow tires. He replaced the fluid and I bought 4 new snow tires (which I was going to do soon anyway).

However, my problem is back. Is my front differential toast? Or has my transfer case gone south? All other fluids are normal. The hydraulic fluid leaks slightly, but nothing major. The 4matic functions normally. The other thing I notice is a little lag time between stepping on the gas pedal and power being engaged. I'm going to take it in on Monday but would like to know what I may be getting into. Also, should I disengage the 4matic before driving? Any help would be appreciated, sorry for excessive detail and length. Thanks!