Its a o-ring, not a copper crush washer.

I don't know if you are using a old style or new style modulator. But it just slides over the end, and it gets squished in once you tighten down the retaining plate.

__________________
Just my MB's:
1990 420sel - Winter DD - 410,000km
1990 560sel - absolutely showroom mint - 360,000km!

Das Benz,

I found the thicker o-ring. Now it looks like it will seal well when I bold it in.
The O-ring I installed first was way to thin. Gonna reinstall tomorrow.

Thanks

Hey guys, so rebuilt trans in. No leaks, engages all gears. But I've adjusted the vacuum modulator as far to the right as I can (rotating the cap counter clockwise) I still have a flair 2nd to 3rd, and 3rd to 4th. What do you think? Reused the same modulator.

Is it the new style modulator with the locking white cap that only turns about 3/4 of a revolution?. If so, you need to pop the adjustment cap off, and turn the t-nut inside till you get rid of your shift flare. There might be other issues causing the flare, but adjusting this will tell you if it was just low on pressure or other gremlins exist. You can run and test with the modulator cap off until you are satisfied with the feel, the new style modulators will not suck in air if the cap is not on.

__________________
Just my MB's:
1990 420sel - Winter DD - 410,000km
1990 560sel - absolutely showroom mint - 360,000km!

I think you need to turn it the other way. As far as I recall clockwise should firm up the shifts.

__________________

90 300TE 4-M
Turbo 103, T3/T04E 50 trim
T04B cover .60 AR
Stage 3 turbine .63 AR
A2W I/C, 40 LB/HR
MS2E, 60-2 Direct Coil Control
3" Exh, AEM W/B O2
Underdrive Alt. and P/S Pulleys,
Vented Rear Discs, .034 Booster.
3.07 diffs 1st Gear Start

90 300CE 104.980
Milled & ported head, 10.3:1 compression
197° intake cam w/20° advancer
Tuned CIS ECU
4° ignition advance
PCS TCM2000, built 722.6
600W networked suction fan
Sportline sway bars
V8 rear subframe, Quaife ATB 3.06 diff

Rotated it both direction to the stop. Little change. I'm going to pop the cap and adjust clockwise. I'll let you know how it goes. Thanks for the help.

It's the new style with the rotating cap. Like you said, only 3/4 of a turn.

Success! Popped the cap and turned till shifting to my liking.
Now one more thing, the parking pawl is not engaging. I've checked and adjusted the shift rod, but didn't help. When I reassembled the trans, I noticed that the plate that the pawl engages was not flush with the casing. It was slightly recessed, maybe an 1/8 of an inch. Should it have been flush? Do I need to pull the tail off and add shims to bring it up?

I had shims in mine. Definately had to be flat. I am assuming your 722.369 had an oil plastic tube that was by the gearing area (mine did not).

Anyway, there is a video on youtube of a guy opening a 722.4 which is similar to the 722.3 Maybe you can get a glimpse of that section and notice a difference with yours.