I have been looking around the net for info. And came across a few things.
I cleaned the pots out with contact cleaner, this got rid of the scratchy noise when adjusting knobs, mainly the volume. (still a buzz coming from the volume wire)
When I put it back together, there was a new sound, like a giant fly buzzing around. symptoms pointed towards grounding issues again, so I removed the two ground wires and cleaned them with glass paper. There was some rust/muck build up. And changed the old plug for a new one. Buzzing went away.
Then found a crack on the speaker where cone meets "ruffled skirt" (thats a term, right?) , so followed advice and cynoacrelated it but no change in distortion. Then tested the speaker with a multimeter, 8ohms at the amp outlet, and 70ohms at the speaker! I fear the speaker is toast.
...is it fixable, do I need to replace it or rebuild/re-cone it?
I'll phone the local music shop and ask if I can bring it in to be tested, if they do such a thing. I think this is going to be a long project amp.