Classic/Antique Car Repair: Modulator valve, vacuum leaks, 1968 olds cutlass

Question
I bought a 1968 Olds Cutlass convertible. It has a 2 speed transmission that looks rebuilt. It shifts fine but passing gear kicks in and out constantly. I checked for vacuum leaks and then replaced the modulator valve but didn't help.The instructions said the valve was spring loaded but I felt no pressure when I installed it. Is something missing? Could the problem be somewhere else?

Answer
A couple of things to check here. Make sure that there is manifold vacuum at the modulator and that there are no leaks in the line. The down shift (passing gear) is controlled on this transmission by an electrical switch mounted near the carburetor that sends an electrical signal to a down shift solenoid on the left side of the transmission. Make sure that this switch does not engage unless the throttle is wide open. The switch could be defective or the solenoid could be defective. If these check out then the problem is internal. The vacuum modulator only controls the shift points in conjunction with the internal governor.
Brad