I think the largest problem you've probably had is that the application is in mod_perl

I love mod_perl- i develop in it extensively - but if you have legacy mod_perl code, I bet thats probably the scariest f'ing thing in the world. the design patterns people used in mod_perl 5-10 years ago are just plain frightening

now, i'm not sure if this would be a strangler method or not, but this is what i would do:

i'd spend some time designing a whole new application. i'd make it 100% modular and extensible, easy to upgrade, easy to extend.

i'd create an abstraction layer using an ORM like Rose::DB::Object ( i usally hate them, but in this case, i think it makes sense ) to map new objects onto the extisting database (and vice versa). with a little bit of smoke and mirrors, you can get your object classes talking to two very seperate database models, but with the same user interface.

then, bit by bit, I'd migrate sections from the old system onto the new one- as they're built

in essence, I'd rewrite your system , but do it in a manner that is more in-line with refactoring.