Is my transmission modulator okay???

[goldstone]

While performing a routine 20,000 mile transmission fluid/filter change last week, I opted to adjust the shift modulator counter-clockwise a few clicks hoping to smooth out increasingly rough shifting. (While I know how to make this adjustment, I've never before done so.)

From the exterior, the modulator appeared to be in great shape (no vacuum leaks, dried out rubber, or any other obvious problems.) So, I was surprised when I removed the modulator cap (black on my '89 420SEL) because there was dark fluid trapped inside. (I assume this was tranny fluid, but I don't know that for sure.) Anyway, I cleaned and dried the modulator and carefully eliminated this dark fluid residue. I then adjusted the T-bar as described, replaced the cap, and lowered the car.

Transmission shifted better after the adjustment and fluid change, but not smoothly enough to satisfy me. So, I decided to go back under again tonight and further adjust the modulator. SURPRISE... It was wet under the cap again (this time with clean fluid). I dried and cleaned things again, made the modulator adjustment, tested it out, and it feels better still.

My questions are these: Is that fluid under the shift modulator cap supposed to be there? Or is the modulator bad? Am I a fool to be making these adjustments to this original tranny with 215,000 miles on it? (i.e. Should I be happy it's still functioning normally--rough or not, and leave well-enough alone?)

Thanks for any experienced guidance here...