[Ron Ramirez]

I forgot to mention CFL bulbs. The ceiling fan in our living room has four CFL bulbs in it. My 41-616 was making a low grinding noise when on, that it did not make on the bench. Turned off the lights in the ceiling fan...the noise stopped.

Anyway, to answer your issues:

1) If the shadow is not changing at all, you have either a mechanical problem (vane doesn't want to move) or a weak/dead magnet inside. Yes, there is a tiny magnet inside the shadowmeter, and these can go bad. Chuck's site has helpful info on shadowmeters:

http://www.philcorepairbench.com/tips/svctip01.htm
http://www.philcorepairbench.com/tips/svctip01a.htm

2) Yes, alignment problem.

3) The safety caps from each side of the line to ground are causing the sparking. The only way to eliminate the sparking is to eliminate the line bypass caps, which I do not recommend.

4) Oscillator issue. First, try changing resistor (21) from 10K to 7.5K. Schematic here:
http://www.philcoradio.com/tech/images/1491.jpg

If that doesn't help, you may have to pull the oscillator coil and either bake it in your oven for 30 minutes at 200 degrees F (do not exceed 200 degrees), or carefully go over it with a heat gun on low setting for several minutes. I recommend the oven method. Set the coil, lugs down, on an old baking pan lined with aluminum foil. The wax will collect on the foil. When done, let cool then throw the foil with the old wax away. By baking the coil, you are removing moisture that has built up over the decades and which impedes normal oscillator operation.

Read about a similar experience I had with a Philco 89 on Chuck's site:
http://www.philcorepairbench.com/tips/svctip42.htm