where is the vacuum modulator on a chevy 305?

The vacuum modulator is always on the transmission, just above the pan, near the front of the tranmission. You test if by pulling off the vacuum hose. If ATF leaks out, even a little, it is bad.

This sounds like a Turbo 350 or 350C (lock up converter). Anyhow, the modulator is on the passenger side rear of the trans case. As the other poster said, if you get fluid when you pull the line, it's bad. HOWEVER, there is a chance you have the wrong vacuum source. The modulator should be reading MANIFOLD vacuum signal from the engine. This signa; will be highest at idle and drops with throttle opening. The other vacuum source is "ported" and usually comes off the carb....it will be low at idle and gradually increase (not what you want since the trans uses "low vacuum signal" to indicate a load on the engine and up the line pressure to the clutch packs).