Occasionally leaks may occur near the modulator making you wonder if the modulator is leaking or otherwise needs rebuilt. First check the o-ring on the fill tube where it enters the transmission case. This o-ring will harden over time and slowly start weeping oil, especially when the vehicle is parked as the fluid level will rise over the o-ring seal.
Below is a picture of a hardened, leaking o-ring.
For the 3-speed TH400 (3L80), the NSN for the o-ring is 5330-01-184-6492 , but can be commonly sourced at any parts house as the transmission filler tube o-ring for a TH 400 or 3L80.