Actually, I'm very happy with the tone of the amp, as long as it is about 9:00. Even that wouldn't be an issue if I didn't have the amp at the shop for people to try out their guitars - in my own use, it will be much louder than that, all the time. To me, it sounds best in the 11:00 - 1:00 range, or at least that is where it does what I built this amp to do (nice clean sounds). But a lot of our customers are pretty young, inexperienced guys, and either they don't want to play very loud because they are nervous, or we don't want them to play very loud because, well, they are less than melodious to listen to. So I would very much like to figure out why it is distorting at lower volumes. C27 IS grounded, just through R17. Perfectly normal thing to do, and I very much doubt it is what is causing the distortion at low volumes.
Oh, and it doesn't distort like that if you just turn down the guitar's volume, so I'm assuming it is something to do with the load put on the grid of the second half of V2. Does that make sense?
Oh, and yes, I am committed to those tone controls, at least on this amp, because they sound good, and frankly I HATE the way most tone controls are interactive. On this one, each control works the same way, regardless of what the other tone controls are doing. It takes a few more parts, but it works the way I think an amp should work. Honestly, the ONLY thing I'm not happy about with this amp, right now, is the distortion at low volumes. (I love the distortion at high volumes - this thing is tight and kicking when it gets loud!) I didn't want a real "traditional" amp, which is why I didn't build one.
Gabriel