[Arran]

Actually the rotten insulation theory make a lot of sense, since you were trying to recap the radio it's very possible that some of the old wiring was disturbed, the insulation flaked off, and it is now shorting to the chassis. Since the IF cans from this era have the same crappy rubber wire as the rest of the radio, and one side of the IF cans is connected to B+ anyhow, this could be another place to look. The wiring to the IF cans should be replaced anyhow, the last early 40s Philco I worked on needed it too. Just make sure that if you do replace the wires do it one at a time and copy the route and length of the original wire, it's a bit tricky to do but not as bad as changing the micas in an IF fro the 1950s.
Regards
Arran