Fluid pouring out of TH350 when vacuum modulaor removed, hard time getting into 3rd

[greywurm]

I'm debugging a late shifting issue with my 350 at. It has a hard time going into 3rd... Sometimes if I let off the gas for a second it will go into third by the time I give it some more gas, but sometimes it still stays into third. Last week, it started having issues staying in gear going uphill on the highway. Under heavier load it bounces back and forth between 2nd and third constantly every 3-5 seconds.

Anyways, I first figured vacuum leak or modulator, second would be kickdown cable (rubber insulation is slid up from the tranny about 3 inches exposing the inner cable). The rubber portions of the vacuum line appear to be ok, so I went to replace the modulator today. The moment I pulled it out, fluid started gushing out from the transmission. Is this normal or is the modulator valve shot?

I should note I just changed the gasket a couple days before I noticed the issues because the tranny leak looked to be coming from the pan, however it still leaks. So the fluid was changed at the same time and I used some transmission conditioner with the fluid, so I am tempted to also think that changed the fluid formula to something the tranny doesn't like.

I have only had the truck for a few weeks, so there could have been a problem beforehand that I hadnt noticed yet. Its a 71 fleetside with a 68 250 i6 on a th350.

Any insight, ideas, or discussion is appreciated. I can give more info if I left something out. Thanks!