Fluid pouring out of TH350 when vacuum modulaor removed, hard time getting into 3rd

[leddzepp]

The governor is not your problem. If it was the transmission would not upshift at all. The vacuum modulator or a cracked hose causing a vacuum leak going to it is what I would suspect. I had the same problem with a TH400, and this is what I was told. Turned out I had a brittle spot in the line and it was cracked, causing a slight vacuum leak. Replaced the line, problem solved.