What was found
IN FLIGHT AT FL350 ABOUT 2 HRS INTO FLIGHT, AP KICKED OFF, COULD NOT ENGAGE HEADING MODE, COULD NOT ENGAGE LNAV. RECOVERED BY PUTTING FD 2 ON MASTER, AND LNAV/VNAV ON WITH B AUTOPILOT. CA HEADING BUY FROZEN ENTIRE TIME. NO LOC, GS DIAMONDS ON CAP FD. AT GS CAPTURE GOT CA FD ON, BUT STILL FROZEN HEADING BUG, NO ,LOC, NO GS ON CA PFD. GROUNDED - YES. REMOVED & REPLACED MCP IAW B737-800 AMM 22-11-34/401. PERFORMED MCP INSTALLATION TEST IAW AMM 22-11-34-740-801. PERFORMED DFCS VERFIFY TEST IAW AMM 21-11-00. OPS CK NORMAL. (REF L/P 60367079)