Can you adjust the vac. modulator on tran. to compensate for adjusting the ALDA, if so which direction do you turn it to make the tran. shift crisper. It has been a long time since I have adjusted the modulator I remember it made a lot of difference in the crispness of the shifts.

On my transmission (722.118) you turn the key clockwise to increase the modulation pressure. This link seems to have a good overview of adjustments:

http://www.mercedesdismantlers.com/diesel_vacuum_system

__________________
Bill Reimels
Now down to one:
1972 300SE 3.5 W109 (Euro delivery)

I just went through the same exact thing. If your shifts were firm enough before adjusting the adla, your modulator is okay. If you remove the vacuum line to the modulator and confirm that your shift are adequately firm, the modulator is already where it should be. Adjusting it too much can increase hydraulic pressure in the transmission above where it should be.
The problem I had after adjusting the adla was that I no longer needed to push down as far on the accelerator to gain speed as desired, so, the device on the back of the injection pump that decreases the vacuum signal to the modulator, depending on how much you are depressing the accelerator, is not lowering the vaccum signal to the modulator as much. This now creates a softened shift because the vacuum to the modulator hasn't dropped as much since you aren't depressing the accelerator as much as before the alda adjustment. The idea is that you want softer shifts if you are accelerating gently and firmer shift if you are accelerating hard. This is done by dropping the vacuum to the modulator the more you depress the accelerator. That relationship changed when you adjusted the alda and no longer need to depress the pedal as much to get even better acceration.
If you verify that the modulator gives firm shift with the vacuum line to the modulator disconnected, you need to adjust the device at the back of the injection pump so that the vacuum signal to the modulator is decreased sooner and with less depression of the accelerator. This is done by lengthing the small vertical rod, if you have that style, or by adjusting a nut on the back side of the IP. A might vac if helpful. If you do a search, you will find a very helpful link, with photos and description that someone provided about 2 weeks ago.
One thing to note,,, if you have the small vertical rod type adjustment on the back of the IP, there is a small plastic clip that locks the upper end of the adjustment rod in place. This plastic clip was brittle and broke, the remaining part of the clip was able to hold the rod in place, but I went to the dealer and ordered a new lock/clip, it was $3.00.. Let me know if you need the part number, it was a bit of work to find the part on the dealers computer pictures. Good luck.

Thanks for the help I will look at my shop manual to locate the adjustment.