Vacuum should be full manifold vacuum, so in other words you have it connected correctly.
You know this may be a governor problem. Did you rebuild the governor when you did your rebuild? Remember that it helps determine shift position based on its counter weights, and how fast it is spinning (RPM).
As far as the rebuild goes...
When you re-assembled your valve body did you make sure to include all the right seals? There are some pressure checks you can do to verify that the appropriate fluid pressure is being applied whenever the gear selection has been changed. You probably should have done that before it went back into the truck. Whenever RPM is high enough modulator vacuum is supposed to help shift into 3rd and not hinder it. Almost sounds like the vacuum is trying to prevent the 3rd shift. This would lead me to believe that the valve body isn't translating the vacuum-to-fluid-pressure to indicate a 3rd shift correctly, or a bad seal is allowing fluid pressure to drop...
Just thinking...
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'69 3/4 ton C20 2wd-350ci/TH400
'69 3/4 ton Custom 20 2wd-350ci/4sp Manual
'99 2wd 5.7 Chevy Tahoe
Seattle, WA.
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