Hi Rick,
I am assuming it's a 4spd. manual trans.?
There are several nylon bushings and rubber gaskets that keep all the
shifter parts together. Sounds like maybe the lower shifter bearing support (rubber gasket) has disintegrated, allowing the shifter bearing to drop part way through the hole in the trans. tunnel.
You'll have to remove the carpet over the "hump", and undo the rectangular nylon cover over the shifter, to see what needs to be replaced.
Will W14
1965 230SL 4spd
Victoria,BC