C4 not down shifting

I just installed a newly rebuilt C4 transmision in my 66 mustang and it is not shifting properly. When i put it in reverse it works fine, then the drive position it will shift up through the gears but very mildly. I am running open headers right now so its loud and hearing the shift is hard but i have had it up to 70 with very little gas pedal and low rpms so I assume its making it to third. When coasting for a while say uphill it should drop down to 2nd but seems to be in third. Get a rpm increase with no thrust. If i pull off the road and stop it seems to stay in 2nd. I can manually shift it just fine. I have checked the vaccum pressure at the modulator it is about 10-12 the pin in front of the modulator is 41mm long or 1.614 inches. this is the push in type modulator. I was told to screw the modulator adjustor all the way in and half a turn out , and it did seem to help a bit. Any other ideas out there???? Is the pin long enough??

Yes, your modulator is as long as it should be - much longer and it will bind the valve.
You have a post 70 C4 in a 65 mustang - check to make sure your linkage is properly adjusted. It should be adjusted in Drive and the transmission lever in drive with no movement as you tighten the lock nut. Also check that your throttle is opening all the way when you floor the pedal. Check for .060" clearance on the downshift lever - no more!
After you do that let us know how it shifts. (low vacuum will delay the shifts and should make it downshift at higher speeds and with less pedal pressure)

"Check for .060" clearance on the downshift lever - no more!"

Thanks for the tip, could you clarify the statement above for me. Are you talking about the kickdown cable? Where do you measure the .060" Thanks! sorry for my ignorance....

If you are using a cable theb the adjustment is:
With the throttle held wide open, and the cable pulled as far as the kickdown will allow, there should be no more than .060" of slack in the cable - there can be no slack but it should not limit throttle travel.