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I am restoring a Philco PT-2 radio from 1940.

I have a problem.

When I tune below about 800 kcs, the radio goes into motorboating oscillation
but still receives signals to a degree. 

There does not appear to be a short in the vari-cap. 
The motorboating effect changes with tuning and the vari-cap does not seem to short out.

On the Rider print for the PT-2, there is a IF trap filter at point 5.
When I lift that filter from ground, the set will motorboat all over the dial regardless of frequency.

I should mention that I have replaced the paper capacitors with Sprague Orange Drops.
I recreated the winded coil over the .2uf 400 VDC capacitor as part of the IF filter.

I have tried connecting the antenna coil built into the cabinet in both directions with no improvement.

The 7A8 tube tests good on my military surplus TV-7 tube tester.

Can you suggest anything I can try to cure the motorboating?

Attached is a picture of my recent rebuild as it looks today.

Thank you very kindly for your time and consideration.

Karl Zuk  N2KZ  Katonah, NY
Hi Karl and welcome,
https://philcoradio.com/library/download...20Book.pdf
You didn't mention if you aligned the IF with a generator @ the proper frequency.
Sometimes wire position can be somewhat critical. If you did replace wiring in the mixer circuit try repositioning for best results. Maybe a little more decoupling may help. Try increasing the value of #7 or #11. Would try shorting out the L portion of #7. There may be something different about the makeup of the new cap vs the original so it doesn't act like it should. Check the bottom (avc side) of the loop ant for a good connection. I trust you checked the voltages around the mixer for anything that out of the normal.

GL de N3GTE
What does the other black wire on the ground point by the candohm go to? 

The point I'm referencing is where you have the wire lead of the "winded coil over the .2uf 400 VDC capacitor" grounded.

Johnny
The .2 uf Orange Drop is grounded to the ground lug attached to the resistor pack mounted on the side of the chassis. Thanks, Karl