300SEL/M103 smoking like crazy, line to vacuum return modulator full of tranny fluid

[ThePhoenix]

Well the title of the post pretty much says it all. I was on the freeway and started to notice billowing clouds of gray smoke following me. It got worse every time I touched the gas pedal. My first thought was - oh crap - head gasket or valve seal issues, but after reading some threads here, I took a look at the vacuum line going to the transmission modulator, and sure enough it's full of red transmission fluid.

Am I correct to assume that replacing the modulator and changing the fluid is what's needed, or is there anything else I should be on the lookout for? And what's a good source for a new modulator?

Big thanks in advance!
ThePhoenix