Ignition Mis?

[T-Bone]

I am the owner of one 1987 Mercedes 450 SEL. I have a problem with warm engine idle in gear. This is weird but under a load at a light I experience a hesitation, miss or stumble. I first thought that I had a plug firing to ground so I checked it at night and found the oddest thing. I have the distributor wire glowing blue in the dark to the number one cylinder. So I thought maybe it was the wire shorting or an ignition short. I have replaced the plugs, wires,cap,rotor and cleaned grounds but still have the issue at warm temp under load. I say under load because when I feel the stumble and put the car in neutral I can't feel it any more. The car also when running 55mph or above, I let of the gas and a decelerating feel as if lightly applying the breaks occurs. So I am wondering am I chasing an engine problem when it is actually a transmission problem. Could the hesitation I am feeling actually be the converter slipping and grabbing thus the deceleration from 55 down could be the converter as well. It accelerates well and I have never felt under acceleration any kind of slippage. Any ideas would be appriciated. I have more tools and time than money to throw at this car.

Thanks,
T