Hello,
I had the same problem with my 250 SL (and others in this forum before me). Turned out a locking pin in the rear of the transmission was the problem. Thanks to the BBB, parts from a donor transmission, a helping hand and a nice weekend everything went fine.
The repair in my case consisted of removal, replacement and installation of the Rear Transmission Housing with centrifugal governor (see BBB 27-8). You can do the repair with the transmission in the car. The exact procedure can be found in 27-28 ("Rear Transmission Housing and Centrifugal Governor"). It is important not to deviate from this. After removing the back cover, look for the locking pin inside. Check it and if its groove both are in proper condition (not that easy to find, try first BBB figure 27-28/11 and look for item no. 35b).
My locking pin had done the impossible: turned itself 90 degrees and somehow lodged itself tangentially to the axle/output shaft (with the slot nut) rather than perpendicularly as by design. The pin itself was slightly damaged (flattended), as was its boring/groove (a bit disfigured).
How could this happen in the first place? An indication of something suspicious could actually be seen from the outside of the rear transmission housing. The distance between the three legged flange and the housing seemed wrong. The telltale was that the bolts and the flange area around the bolts showed wear (which I had not noticed before). Someone must have ignored to apply the correct torque wrench settings which had resulted in components gradually working themselves out of position. Which made sufficient room for the locking pin inside the rear transmission housing to turn on itself. Which again made the governor standing still on the axle. No movement from the governor, no hydraulic pressure to bring the transmission from 2.nd to 3.rd or 4.th gear and no movement of the speedometer as well.
It´s probably worth a try before pulling out your transmission for a total rebuild.
Keep us posted