[Mondial]

I would also go with the film for C776, especially since its only 0.5 uF.

Tantalums come in handy for large values and low leakage, but in general if you can physically fit the film cap you are probably better off with film.

Sound like something with the stereo muting circuit is causing the distortion. Does the voltage at the collector of Q406 drop to near zero when receiving stereo? If not it will apply a voltage to the preamp transistors acting to cut them off and inducing distortion. Don't think C30 is the problem here as it only serves to filter the applied voltage from the beacon circuit. If it leaks it would reduce the muting action, not increase it to the point where it would start muting and cause distortion.