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Yes, the noise is happening on both channels. Interesting on the 2 power supplies used in Kenwoods. Can see it very clearly on the diagram. Have to really pay attention to those line and see where they go. So that takes out the PS for the Phono and tone amp out of the equation. That would leave us with either the 2 filter caps or it could be one of those Bridge Rectifier Diodes (De12-De15)? I tested the 2 filter caps and both tested OK (within specs). Or could it be one of those .022uf snubber caps?
The noise/distortion is a kind of lowering of the volume in one channel or then both, lasts for a short while (less then a couple of min.) and then works great again. So maybe it´s running out of power or something related to the PS? It is not a loud pop or harsh pop corn sound--which is more or a transistor going bad sound, if I´m not mistaken. I wish there would be some "audible guidelines" for parts failures. Kind of like a car mechanic. In 2 seconds, just by listening to it, he knows it´s a problem with the carburetor.
Can´t be the electrolytic caps, transistor or D1-D2 diodes since they are all new. Oh, forgot. Could be a bad resistor? I thought that they never go bad --and if they do, you can visually see discoloration. All the resistors look fine. Anyway, I´m rambling on and don´t have a clue, BUT, thanks to nice people like you on this forum I am learning new things each day.
Just like John Gotti said, "I´m gonna be a gangster or I´m gonna die trying", I say, "I´m gonna fix this little baby or I´m gonna die trying".

Have to keep at it and keep practicing. Thanks again buddy!! Will keep you updated on this little soap opera.