properly, the problem is in the circuit of 7.8 MHz AMP (TR6) or in the circuit of Balanced Modulator (IC2) or in the Microphone AMP (TR16). If no RF voltage of 7.8 MHz, 50 mV/P-P appears at pin 8 of IC2, check circuits from TR28 to pin 8 of IC2. If no audio signal of approx. 70 mV/rms appears at pin 1 of IC2 under modulation, check circuits before TR16. B) If the voltage reading at pin 8 and pin 1 of IC2 are correct then problems are with TR6 bias circuit or D6. C) If the output of TR6 is produced properly check item D) and E) of NO TRANSMIT (AM) above.