karolscali;
1.) Do the turn signals work OK when the Emerg Flasher switch is OFF?
2.) Do the 4 way flasher lights work OK when the Turn Signal Switch is OFF?
If the answers to these questions is Yes, you probably have a faulty Turn Signal Switch in the steering column. (Cost about $95)
If the Turn Signals work OK, and the Emerg Flashers work OK independently of one another you could leave well enough alone & save $$$ and work. Your choice. Chances are if you had need to use the Emerg Flashers, you would not have the Turn Signal selected anyway. And if you're driving, using your Turn Signals, you would not be using the Emerg Flashers. If you choose to have everything 100% correct then you will need to replace the Turn Signal Switch. According to the Wiring Diagram, the Turn Signal Switch is the ONLY common denominator for the two circuits.
I tried to duplicate your description on my CS (same for ALL '68's) and with the Emerg Flashers ON, the Turn Signal lever had no effect on the lights. All 4corners kept flashing. Hope this helps.
Neil Hoppe
P.S. The Instrument Voltage Regulator is a fairly common bugaboo. I recall that someone advertised a more modern (solid state) replacement unit but my memory fails me as to where to get one.