The example that The American Heritage Dictionary uses for modulo, "This proposal is the best so far, modulo the fact that parts of it need modification," is a confusing and poor usage of the phrase. Unless a reader has a strong analytical mind and understanding of the phrase, they would likely interpret the sentence to mean that the proposal is the best as-is, and it would be even better if it was modified.
On the other hand if the sentence is correctly interpreted, the sentence is meaningless, for a couple reasons. First, a “fact” does not change the quality of the proposal, and so has no impact upon its ranking (i.e. whether it is “best” or not). In general the phrase “modulo the fact” is a poor usage of the word. Second, even if the reader imagines modifying the proposal to be the best, the sentence is still meaningless, because every proposal could be modified to be the best.
Mitch’s example is far better:
"The rocket design was flawless, modulo the toxic waste produced by its fuel."
The best replacement word that I can come up with is “discounting” or "not accounting", so
"This proposal is the best so far, discounting that parts of it need modification."
(Still meaningless for the reason stated above.)
Or, in Mitch’s example,
"The rocket design was flawless, discounting the toxic waste produced by its fuel."