Wish I had verified it myself - this is from the dealer after they ran a vacuum system diagnostic. They said the EATC was losing vacuum and that's why all my position settings will default to defrost under load. I did verify that both vacuum check valves were good, and when I disconnected the lines I heard hissing both times, so that did leave me to believe that the system can hold a vacuum. I also did not see any corrosion or failure of any fittings/hoses around the battery, which seems to be a common problem others have.
I found a place in TN that rebuilds automotive electronics (found them on a Grand Marquis board of all places). They have the 02-04 EATC rebuild listed for $245. They have many good reviews and say they can turn around most in 1-2 business days. I'm going to give that a try before I pay the dealer $775 to replace it. I'll reply in a couple weeks and let everyone know how it turned out.
http://www.autoecu.com/