[jwidner]

The way you have the .5 drawn there in the last illustration shows it is being used as a substitute for the .1 labeled as #23, as a bypass condenser on the 400ohm R24. I would imagine changing the .1 in the block to a .5 would have much the same effect, also, it should work fine with the original values. Make sure the grounding of that .1 is good, that could be part of the problem.

Thanks, Mike.  I'll be updating that bakelite when I get my parts on order sent to me. I'll temporarily remove the .5, tack in the .1 and see if anything changes.  The person who made previous repairs to this radio before I bought it simply installed that .5 DYRT that I removed.  As you mention, perhaps he was just fixing a problem without having to mess with the bakelite and used what he had on-hand. 

Jim