I didn't have time to figure out why the permissions weren't showing up in the ACP for 3.7 but anyone trying to get it working on 3.7 just open up the private_start hook location and add this after the first if statement:
PHP Code:
$show['pm_search'] = 1;
$permissions['pm_search'] = 1;
That'll make it so all your usergroups can search their PMs. Quick fix for now... You'll need to add the usercp link to
www.sitename.com/forums/private.php?pmsearch=1 still in USERCP_shell as per the instructions in the original file.
Hope this helps someone.