Call Peter Schmid Transmission, They will fix you up. They specialize in BMW and Mercedes trans and have been around for at least 20 years. They are by far the best in the bay area, they usually just do the rebuilding for other shops but the will also do the complete job if you like. 3rd gear seems to be the one that fails on these transmissions, it's no 5500.00 dollar job, but it wont be cheap to get it fixed right.

I can't recommend them high enough, I have been sending people there for 15 years.

1331 Rollins Road, Burlingame, California 94010. Tel (650) 348-3990
http://www.peterschmid.com/