I recently solved this exact problem in my 740 wagon. I figured it was bushings, but when I got under the car and had a hard look at them with my prybar, I couldn't find any that I thought were bad.

Turns out the problem was in the driveshaft, where the 2 pieces of it fit together. There was no grease left on the splines, and they were binding up. I pulled the 2 pieces of the driveshaft apart, put a good coating of axle grease on the splines, and then reassembled. It is necessary for the driveshaft to expand and contract easily, as the rear of the car raises and lowers (as you brake and accelerate).

Hope this helps...

--
Matt L. -- Cary, NC -- '91 740 wagon

Hi Eric -

Do this while driving: Start off the line pretty quick, with your hand on the shifter. Feel for engine motion when starting off and when shifting.

The motion can move the shifter fore-to-aft more than side-to-side.

Check also for a mis-match in shifter detents. There are detents in the shifter housing and in the tranny. When things are OK, you can't feel them as separate. If you can feel the two, tranny and/or motor mounts are nearly dead.
Look at how the gear indicator light lines up after dark with lights on, too.

Good Luck,

Bob

:>)