e30 transmission problem

[milpitas325i]

My old reliable '88 325i convertible started having this problem a few weeks ago.
There is no reverse or forward when I first start it in the morning. If I wait for about 2 minutes, it will go but then the gear won't shift higher than the first.. I let it warm up another 10 minutes before it actually starts shifting properly. I had a nearby shop replace the filter .. I see a small leak but not sure where it's coming from at this time. Any ideas what the problem could be ? I've heard a lot of horror stories about transmission shops.. any suggestions ?
Thanks

[88'325]

Did you check the fluid? Sounds like it could be running low (automatic right?).

[milpitas325i]

yup, oil level is okay.. (it is automatic).

[flipsgonetopless]

Well just to let you know what happened to me... I replaced the trany because i broke the hydrolic pump and I ended replacing it. I put in one that broke upon accelaration and I removed that one, well the new one I installed never ran the clutches were burned. I'm thinking its eigther the hydrolic pump or the torque converter. Take it to get a free diagnostic they chould let you know what is wrong.

[Starmavin]

Sounds like a sticking valve body or hard seals alowing the fluid to flow by it untill they soften when warm, having the trans fluid flushed may help. If the fluid has a burnt smell or depending on how much debris there is in the bottom of the pan. You'll most likely be better off rebuilding it, or replacing it.

WARNING!!!!! Do not drop the valve body if you are unfamular with the inner workings of the trans mission. If you so much as lose or missplace a check ball, your trans will work even worse, if at all.