I agree. I would soften the modulator on the transmission itself. CW is firmer, CCW is softer. Remove the cap, pull the metal "T" up enough to turn it, and back it out 1/2 turn at a time. Test drive after each adjustment. If you go too far soft, you'll get flared/slipping shifts - that means you went too far, and need to go back a bit. You want it as soft as possible, but with no flare or slipping for any shift.
It's possible that you'll need to adjust both the tranny modulator AND the VCV (again). You should be able to set the VCV per the factory procedure and obtain proper shifting. Since you had to tweak the VCV out of the factory spec, I think it's compensating for an over-firm modulator.
Final thought - have you tested the modulator line to make sure it's holding vacuum? It could also be a faulty modulator. Another thing is that you can bypass the BFS entirely... have a vac signal into the VCV, and route the output directly to the transmission, bypassing all the BFS junk. I did this on my '87 and it works great.
