Reverse.
You have two issues:
The reverse lights issue should be NSS = Neutral Safety Switch is damaged.
http://www.peachparts.com/shopforum/...tml#post646647
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The transmission sounds like the B3 piston and/or clutch pack has failed.
Here is a quote from the Automatic Transmission Service Group (ATSG) Mercedes 722.1 722.2 service manual:
Trouble:
No power transmission with selector lever in position "R", all forward gears in order
Cause:
1. Band brake B3 wrongly adjusted
2. Band brake B3 and/or lining badly damaged mechanically
3. Free wheel defective
4. Working pressure too low or completely absent --- lip sealing ring on band brake B3 damaged
All of these 'causes' can be tested by removing the pan and valve body. This can be done by you or any decent transmission shop.
Pull the transmission pan and look for signs of sediment in the bottom of the pan, if there is, then a clutch pack rebuild is required.
http://www.peachparts.com/shopforum/...-pictures.html
This is a messy DIY, but IMO only a 4 on the 0-10 difficulty/skill level.
It is a PIA to remove the transmission.
Replacing the old/damaged parts should be a few hours to a weekend, depending on your skill and how much you elect to replace.
In theory, you could just replace only the pump seals/gasket and B3 discs = 1-3 hours bench work.
You must replace the transmission front pump gasket & seals.
http://www.peachparts.com/shopforum/...-pictures.html
When going this far, I personally replace:
Disc, reverse speed = B3, quantity 4
MB# 1262720925
Disc, K1, quantity 4
MB# 1262720625
Disc, K2, quantity 4
MB# 1262720725
Transmission re-seal Gasket Set, no filter in this kit
MB# 126 270 61 00
Transmission Filter Kit, much cheaper than a single filter.
MB# 22 2043 126
Guard plate
MB# 1262723062
Guard plate
MB# 1262722262
90% of the time replacing the friction discs will bring the K1-K2 clutch pack back to proper height.
Measuring with a dept guage is is required to verify.
Warning:
While the transmission is removed; You need to be aware of the loose output flange issue, with age it is coming up more often.
Replacing the nut and/or flange is minimal effort at this point.
http://www.peachparts.com/shopforum/...oblem-fix.html
Here are a few links that may help.
http://www.auto-repair-manuals.com/M...ld-Manual.html
http://w126.pp.ru/akp722.pdf
http://www.ganzeboom.net/images1/gan...3,%20722.4.pdf
http://www.w124performance.com/docs/...722_repair.pdf
http://www.w124performance.com/docs/mb/transmission/
http://www.peachparts.com/shopforum/...e-figures.html
http://www.peachparts.com/shopforum/...stery-pin.html
http://www.peachparts.com/shopforum/...odulators.html
http://www.peachparts.com/shopforum/...124-300dt.html
roy@pelicanparts.com
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Check the bushings everything good there....



