I don't know if the spring belongs there for sure, but I would bet it does -- I've suspected since you first described the shifting problem you have that there was something missing in there. The modulator must move the valve to have any effect, and it seemed to me it wasn't.
We are going to the Brickyard 400 tomorrow -- taking lots of Gatorade and water, it's going to be hot!
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!