1) consistency: hand out warnings and bans according to the rules. use warnings a lot, they dont cost any points, if you guys were too quick to hand out the warning.
2) culture change: 'old-timers' and 'big shots' are too often being overlooked when they are mistreating other members - this is a huge issue.
3) change the mindset of the mods: have fewer 'old-timers' in the mod-group to try and stir up the obvious ingrown mindset of the mods - i actually appreciate you and kate in the mod-group. but you cant do it alone, unfortunately
4) when a mod isnt a good mod. kick him/her: how can a member with a personal vendetta against another member still be a mod? that's beyond any sound reasoning
5) mods should be good examples for the rest of the community. too many mods are on a regular basis arrogant and/or obnoxious to other members - this is a common thing due to promoting members to mods, you see around all internet communities.
just to mention; i was a mod on a similar forum for a couple of years. half the people who got mod-status lost it within six months (either kicked or left) - its a painful job because you cant act as a 'normal' member anymore.