It does sound like the shifter is the culprit. Has anything been spilled in it? It might be worthwhile to pull it out and clean things, check connections, etc.
I think that for most reading the following may sound confusing or complicated however I hope that Rodney and those interested will take the time to review and comment where possible.
As originally reported SDS gave me 4 codes (see attached picture) now down to 1 code only!
1 EZS - Electronic Ignition switch
2 ETC - Electronic transmission control
3 ESM - Electronic selector module
4 ME 2.7.2 Motor electronics
So far I found that the fob key that was initially used was bad (did not work with key-less start) changing to a key that works with key-less start canceled the EZS code.
Removing and cleaning and re-installing the selector switch in the ESM unit canceled the ESM and ME 2.7.2 code.
As I was now left with only the ETC code reporting having a unkown fault I pulled the it from the car and found that the original unit for the model years 2007-2008 which is supposed to be a EGS52 part# 035 545 16 32 was replaced by a model xxxx with part#xxxxxxxxx and SDS kept reporting this as an unkown device.
I did have on hand a ETC unit model EGS52 Part# 035 545 15 32 (from a 2006 SL55) and when it got connected SDS did recognize it and showed numerous issues. However as I'm at this point believe that I need to have the part with # 035 545 16 32 installed (which has the right firmware for the model years 2007-2008) I'm waiting for it to arrive before I proceed.
I will today run an SDS test on my 2007 SL55 which I assume has the EGS52 with part# 035 545 16 32 installed to see what the correct reading are for a ETC unit that has been untouched and is fully functional.
I'll report more detailed findings of may ETC SDS test when available.
A remote thought is that when a transmission has larger than normal amounts of metal particals deposited on the low and high speed sensors sensors (located on the conductor plate) can and will this effect the function of these encapsulated micro speed sensors.
Any comments will be appreciated.