That is correct, no more video out - only sound out of the DIN A/V connector.
My modulator died, I replaced it with one I built myself which was based on the attached schematic that I found.
So I created a veroboard layout which replaced my modulator! I wanted it to be a normal commodore video output though because I use a 1084S monitor. I suppose you could changed it to S-Video output by changing some components. The one I show is only for shortboard c64c and above, not for longboard breadbox. Layout would be very different for breadbox.
The labels on the left-hand side of the board are pin headers (3rd pic) to mount it into the commodore. I put a small foam pad underneath the board so it rests on the c64e PCB, the pins hold it in place really well. The red dot on the vero layout is a cut track, the other cut track is underneath the diode.
This replacement works really well!
My chroma/luma picture on the 1084S is slightly better than it used to be i think!
Probably because it is not driving the RF circuitry anymore.