[jerryhawthorne]

Victor, we need some nice close up pictures to see what your looking at. Nice that the tracer gives a nice tone at the speaker, makes me think you may be looking at the alignment of the radio. Certainly not the OP transformer. Is the distortion present on both the AM and FM bands? I'm not familiar with a signal tracer, never used one. Can you use it to move towards the front of the radio and perhaps inject into the IF section? I use a signal generator and scope when trying to run down these types of things. I need to learn more about the signal tracer. Hook your tracer up to the first IF grid (G1) and see how things sound.
Regards, Jerry