Sounds like a vacuum problem. You will need to trouble shoot the lines, actuator valves, and the integrity of the control head valve.
My best suggestion is to pull a vacuum on each line while the key is on and the fan is running. The easiest way is to actually suck on the line with your mouth. It would be better if you could use a vacuum pump.
You can do this both ways. One, by pulling a vacuum direct on each actuator in the air system. Second, by pulling the main vacuum on the control head, running it through the different zones and checking to see if you have vacuum coming out of the right ports.
I am sure there are some better suggestions out there, but this should get you going if nobody comes up with anything better.
I had the same problem with my '81.. What ever you do.. DO NOT force the wheel. The '81 doesn't have the wheel like your '74, but, my guess is that they are basically the same design. I found mine to be the handle for the "Air and Heat" controls was off center, yours would be a wheel design, still very similar.
I took the console apart and then removed the entire switch. Got it on my work bench then with my '81 assy. manual very close by, I took the switch apart. There is a diaphram (rubber plate) that has grooves in it that match up with a plastic piece to allow the vacumn to move the correct valves for the correct settings. I found a clip holding this all together had come off.
I fixed it and put it all back together only to find that I didn't put it back together correctly. I tried to change the diaphram with the switch installed... I don't recommend trying it.. I ended up taking the switch back out and rotating the rubber diaphram until I got it right
If you FORCE the switch, you will probably break it. Hope this helps, as I've said mine is a 1981, but the switch mech. are probably very similar.. If you don't have a GM Maintenance Manual or an Assy. Manual I recommend getting them, they are invaluable.
That reminds me of a funny gear head story. I help a friend take care of his Lotus Esprit Turbo. The car had been sitting for a while when getting some repairs done. When he started driving it again the tach was not working. It was driving him crazy, and I could not find any loose wires or bad connections. Since the car was out of warranty, he was looking at a time consuming expensive process to get it repaired on his own. The electrical on this car is a little confusing to say the least.
We talked him into autocrossing it a few months ago for the very first time. During his second run he was getting more aggresive and comfortable with the car in general. He was pushing the boost much harder and getting the brakes hotter.
As he came back into the staging lanes I could see the smile on his face through the helmet. Come to find out the tach jumped back into operation while hitting the last part of the track.
It has been working every since. Lotus wanted $500 plus shipping to send it out and 6 to 8 weeks for the repair.
Now that is cool. I never have that kind of good luck.