My '88 automatic was starting to do the same thing.  Slipping out of gear, not shifting properly, taking forever to engage reverse gear...leaking all over the driveway (wife not pleased).  After confering with several pros, I came to the conclusion that all of the seals, pistons, and friction clutches in the tranny were going bad. Anyway...I recently finished rebuilding the automatic.  Wasn't as hard as I expected it to be.  I bought the "rebuild" kit from a company called TRANSTAR.  All name brand parts in the kit.  All of the rubber pistons and seals were OEM VW - and in stock.  She shifts like new again - and no leaks!

The dealer quoted me $4100 for a new transmission. LOL.
I paid about $275 for the rebuild kit.  If you've got the time and the skill rebuild it.  Best of luck.

Jim Bowen
'88 Wolfsburg Weekender
'74 Super Beetle Sun Bug