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The vertical output tube needs to be replaced. the blue glow indicates a gassy tube (air has gotten inside the vacuum.) If you're hearing sound but only seeing gray, there is a problem in the video amplifier section. Could be a tube, but more likely some bad capacitors. If you haven't replaced the paper coupling caps in this set you can't really judge its operation condition or really begin to troubleshoot until you do.
The vertical linearity interacts with the vertical height adjustment to make the picture vertically symmetrical and not too stretched or compressed at the top or bottom.
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Jordan
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