vacuum modulator

There should be NO motor oil in the transmission vacuum modulator. Unless there is motor oil in the transmission I know of no other way motor oil can get into the transmission modulator. Perhaps somehow motor oil is entering the vacuum line some were else and traveling down to the modulator. Try running the engine with the vacuum off of the modulator and try and see if the oil is coming out of the vacuum hose or the modulator. Oil in the vacuum lines should also show up as smoke out of the tail pipe - are you seeing excess smoke from the exhaust?