I'm pretty sure that transmission is snafu'ed. The MK.IV automatic transmissions aren't renowned for their durability — and eventually begin slipping (or worse , like in your friend's case). They're next to totally unrebuildable, and when the problem is internal — 9/10 mechanics will encourage replacing the transmission.
A new one will cost their first born child (n' a bit of yours by association). A used one would be a more financially palatable solution, but it'd be a roll of the dice regarding how long that one will last. You can end up w/ a decent used auto-transmission provided you shop carefully and know as much as you can about the car it came off of.
You'll have to at least know if its compatible with what you have on your car (the Mk.IV transverse auto-trannies didn't change much throughout production though, so I don't think you'll have too much to have to choose from).
Long story short, I'd say there's major internal wear preventing correct selection and a replacement box is likely your most practical solution.


) so the thermal expansion rate of the fluid does not interfere with the level required. it is a pain in the ass, too. not like the manual, where you pump it up til it runs out the fill hole. 


