John,
Sounds like the governor gears have stripped their teeth, happened to my trans a while back. These gears are in the back of the box, inside the rear tail cover... they are helical gears that drive the governor (tells the trans when to shift), speedo and the secondary oil pump. These gears seem to be a weak spot on the K4A auto trans, so I'm told. I replaced mine with used gears from a parts tranny I purchased. The used gears looked OK but were crack checked, bead blasted and finished with a micro media REM process to remove any stress risers. The Classic Center can supply new gears but they are quite pricey, relative to my 230 sedan anyway.
Beautiful car by the way!
Pedro Campuzano
Mooresville,NC