Yep seen that lots of times. One friend of mine was on his 5th or 6th repair when the transmission started acting funny. He said, Darn it, that darn hose has fallen off the transmission again. He said he had cut the end off a couple of times until it got too short, and he said that he had replaced the hose twice.
He had on some good clothes, and asked me if I would slide under and cut the bad end off. Said he had left plenty of slack so he would not have to buy a new hose for a while.
We were not far from town, so I told him to just go ahead and go to the parts house.
I went in, bought a new modulator. Slid under right in the parking lot and changed it.
Just for fun, I didn't tell him what I had done. Just told him I had replaced the hose again.
Several months later, we were driving through the woods hunting, and he suddenly snapped his fingers. Said, I have been meaning to tell you, whatever type of hose you put on the transmission last time worked great. I have not had to fix it since.
I just smiled.
Sometime later, I got a call from him. He said that he was in the local dealer talking to one of the mechanics he knew, and another one came up with a piece of swollen hose. My friend saw it, and said be sure and put the type hose Fordum put on mine. It never swelled again.
They walked outside, the mechanic slid under, and told him I had not replaced the hose, I had replaced the modulator because it was leaking and causing the swelled hose. He could see the modulator was fairly new.
He wanted to know why I had not said something. I said it was too much fun to let him think he had been using the wrong type hose.
BTW, after you replace the modulator, be sure to check the fluid level in the tranny. That fluid was not stopping at the end of the hose, it was being sucked up into the carb and burned. Usually the leak is small enough that it does not take all that much out of the transmission, but some times the leak is larger than others. You usually start seeing smoke if its that large though.