Scale Degree Modulation is based on the fact that each of the 12 tones of a Lydian Chromatic Scale can be one of 12 scale degrees in any of the 12 LC scales. The tonal order chart, the interactive circle of fifths, the interval chart, or chart A illustrates which scale degree that might be. For example 'E' (pc 4) is C LC iii or G LC vi. Scanning Chart A in C, we see that E occurs in LYD, LA, Lb7, AA, AD, & ADB. The 'Lydian Chromatic Order of Tonal Gravity' chart indicates that in the C LC scale, E is introduced as III at the 7-tone order. In the F LC at VII.Scale degree modulation is the technique uses for constructing a pan-modal melody in the parent Lydian Chromatic Scale, the one to which the melody is being related.
In addition E occurs in each of the C horizontal scales, of which their are 12 sets as well.
In Russells example (1959 pE), he uses the tonic tone of the prevailing tonality to modulate, by assigning it a position in the next predetermined horizontal scale. A good entry level strategy.
In a free interpretation for improvisational and/or compositional purposes, the modulatory tone (e.g., the 'money tone' of a melodic gesture, may be assigned to any degree of any of the 11 scales of any LC scale.
I tend to choose color tones for a gesture, e.g., to define a LYD, the 3d, #4 & 7, in addition to the tonic.
To insure a shape to the structure, it is well to keep in mind whether the modulations are moving to the flat side or the sharp side. (see chespernevins posts in this regard). For example moving the LCs to the flat side for the first 2/3s, then to the sharp side for the last 1/3, would given a nice overall shape to the piece or section. (i.e., the 'Golden Mean.')
Adding changes? Compose a melodically coherent bass line under the resultant melodic structure (or in an improvisatory situation, hire Charlie Haden). A little counterpoint could help here.
"How 'bout an example," you ask? Gulp! OK. My midi isn't hooked up, so this make take a minute. I think I'll take motherlode's advice, and start with a feeling and follow it.
(Working title: "Walking the Plank.") AAAAAAAAAAAAARRRRRRRRRGGGGG.