This is a great answer but I would like to add to it. the part that goes bad on several Lincoln conti's that cause this problem is called a "blend door actuator" I'm not sure if I spelled it correctly but the purpose of this unit is to control switching from defrost to vent and so on. the part is about 25-35 at every junk yard and a bad idea to buy without some sort of warranty, they almost all go bad eventually. A new one from the Lincoln dealership is 89.75 from all three of the Lincoln parts places in my area. My guess would be its the same price nation wide. the service book calls for 1.2 hours of labor time to replace it. a good shop could install it and only charge you about 200.00 after tax. I .Answereven though the system is electronic, the air directional controls are still vacuum operated. Defrost is the systems default position, in the event of a loss of vacuum. Most likely, there is a loss of vacuum supply to the heater control system.
Also, the doors that open and close to direct the air flow are controlled by metal vacuum solenoids where the vacuum tubes plug into. Possibly, one of these soleniods has lost its vacuum seal and is not functioning. To visualize them, you open the glove box door and drop the g-box door all the way down by pushing in on the stop-tabs on either side of the glove box itself. then you can see the air flow phlenum (box) and the three solenoids. Also, check to see if one of the vacuum hoses has just come loose.
On my 1995 Ford Explorer when the defrost position is selected , and the temperature knob is set in the red area to get heated air to defrost the windshield , the A/C compressor will cycle on and off to help dehumidify the air, but the compressor ONLY cycles on and off in the DEFROST POSITION ( sorry if I'm misinterpretting your question )
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