You said you checked the modulator. As in removed the vacuum line and plugged it then ran the engine? They will still work, yet can be allowing ATF to leak past the diaphragm into the intake.
Not to beat a dead horse- but if a radiator overflow is used, the radiator will replenish from the overflow tank. The overflow reservoir will drop, while the rad. stays full, until the overflow is empty.
Just wanted to be sure that there's no mistake there.
Are you using any oil supplements that could disguise the usual smell and color of burning oil?