The Vacuum Modulator on my 91 has really been giving me fits, so I decided to cut an old bad one apart and try to determine why it failed.
This is what your vacuum modulator looks like dissected...
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Clockwise from bottom... clamp, bottom housing half, diaphragm, spring, top housing half, filter, cap.
The bottom housing half has one passage which goes directly to the exhaust pressure chamber. Exhaust pressure from this pipe acts on the diaphragm. The diaphragm should completely seal off this lower portion from the upper portion.
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Diaphragm - pretty obvious what was wrong...
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Upper housing half top view... the small hole is there to allow atmospheric pressure into the upper chamber at all times.
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Upper housing half bottom view... the atmosphere hole is on the left, the central nipple goes to both ports P and Q, and the square hole on the right is the opening for port R. The P and R ports variously pull the diaphragm up enough to seal off the nipple and thus close off atmospheric pressure to port Q which goes to the EGR valve itself. When the nipple is sealed off, vacuum at port P (from the throttle body) supplies vacuum at port Q (the two ports are joined) and causes the EGR valve to open.
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Here is the top half sectioned to show the design of the P and Q ports... that piece of wire is .009" in diameter and is there to show the tiny passageway connecting port P to port Q and the upper chamber. Two pieces of wire would not fit.
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So this is how the system works.
The deciding factor as to whether the main EGR valve is operational is whether the diaphragm inside the Modulator is pushed all the way up against the central nipple, sealing off the Q port from atmospheric pressure in the upper chamber. In this position vacuum at port P (from the throttle body) will transfer to the EGR valve via port Q, and open it.
The lower chamber function seems pretty simple - exhaust pressure is always acting on the lower chamber whenever the engine is running, hot or cold, pushing the diaphragm up, with pressure increasing as load increases.
The upper chamber is the more complex one.
It is vented to atmosphere via the small hole in the pics above, so the diaphragm will only close against the nipple when the vacuum in the upper chamber is large enough to overcome atmospheric pressure through this hole. The P and R ports are responsible for supplying this vacuum.
The P port is the one with the tiny passageway into the upper chamber (left port with wire in the above pic), is connected to the throttle body via the BVSV (to prevent operation entirely when the engine is cold) and is only active in assisting with producing vacuum after the throttle has opened modestly. If the vacuum from port P is enough to suck the diaphragm up all the way, atmospheric pressure from the vent hole will push it back down again because the vacuum effect of port P is disabled as soon as the diaphragm contacts the nipple (the surface area for the vacuum to act on has all but disappeared). The effect is to turn the EGR valve on and off with the throttle in a gently open position and effectively pass a small amount of recirculated gas into the intake manifold. The R port is connected directly to the throttle body and is only active in assisting with vacuum whenever the throttle is substantially open. The R port produces strong suction and can continue to act on the diaphragm even when the diaphragm is up against the nipple because it is sucking on the whole surface area of the diaphragm from its own hole independent of the nipple. In this situation vacuum at port Q is continuous and a larger amount of gas is recirculated. When the engine is cold the system is not operational because even if exhaust pressure from the lower chamber and suction from port R cause the diaphragm to close the nipple port, the BVSV is closed and there is no vacuum at port P to transfer to port Q.
This post has been long enough. Hopefully it is mostly error free.
Edit: just found this, check it out - it's a great write-up of system operation. http://www.lovehorsepower.com/ToyotaPDFs/61.PDF
The Port E that they are talking about is the port on the throttle body with a cast E next to it. This connects to Port P on the Modulator. The port marked P on the throttle body on our Previas goes somewhere else entirely. Go figure.