I talked to the owner and he again told me that this machine played his PAL tapes on an RCA 32" analog CRT TV. It was put away for a while and now he wants to play some tapes from home for his grand kids, and that's why he tried it recently.
I tried it again today and it now plays the PAL prerecorded tape with a normal, clear, and stable picture when NTSC output is selected. Unfortunately, it's in black and white but at least it's now in horiz sync. I'm thinking there might be a horiz phase adjustment somewhere I can tweak. If the horiz is right on the edge of break, it might be causing the loss of color. I tried cooling the machine down to see if I could get the horiz to drift again, but it hasn't (suspecting aging electrolytics).
Anyone have a link to a SM?