904 decel no load downshift?

What you have is a mismatch in the pressures.
With a closed throttle, and the KD mechanical linkage properly adjusted, the TV pressure is at a minimum.
Therefore, it has to be that the governor pressure is too high for the line-pressure; (or the other way around; that the line pressure is too low). My guess is that since it was fine at one time, the governor is just stuck. This is a hard sell for me, cuz Mopar governors just never stick, therefore;
I would revisit the KD adjustment first. followed by the line-pressure

If you have a lot of trouble with this;
What I did was drill and tap a hole, in the case, in line with the Line pressure adjuster, then installed a pipe-plug. To adjust the line pressure now, I just drive the car up on a curb, which tips the oil over to the passenger side and have at it. It only takes minutes now.

You can install a pressure gauge in the governor circuit, and diagnose with that.