Simply having vacuum present at the input to the modulator is no guarantee that it is working. If you have a MityVac or similar attach it directly to the shift modulator and see if it holds a vacuum. If not, that is your problem and it needs to be replaced.

The part is inexpensive (about $35 as I recall) but was difficult to access on my 560SL without a lift. You may have more room on your car.