my problem was that i didnt realize where the collar that holds the modulator to the tranny attached. It goes way behind the brass outer ring and hooks into the white part of the modulator - so the modulator does stick out a bit from what intuitively looks to be right.

instaling it back i got it to seat so there was a very minimal bend in the retained clip, and the modulator seems to be well seated.

tomorrow will be judgement day to see if it works...

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'85 300D, 'Lance',250k, ... winter beater (100k on franken-Frybrid 3 Valve Kit)
'82 300D, 'Tex', 228k body / 170k engine ... summer car
'83 300TD Cali Wagon 210k, wife's car