Hi KKIB;
Yes, 10.5 mhz offset is a hugh offset and bigger then I've come across in my finds. Dial cord streaching does happen over time but not to that extent as the dial cord tension spring would never be able to keep the cord tight enough to function at all. I suspect that possibly that you had some kind of slippage on the main dial cord pully that attaches to the main tuning capacitor. This sometimes happens when someone continues to turn the front panel tuning knob even after the capacitor has reached it's mechanical limit.
The method I use to correct dial offset is to tune in a station of known frequency and then carefully loosen the set screw(s) on the main tuning pully so that I can turn the front panel tuning knob without causing the tuning capacitor to move. After I have the dial pointer at the correct frequency I then carefully retighen the set screw(s) on the main pully. This sometimes has to be repeated a few times as it is sometimes hard to loosen or tighen the main tuning pully without causing the capacitor from moving a little. This method does not cause any changes to the electrical adjustment in the front end circuits.
The problem with the method you chose is that while you indeed corrected the local oscillator frequency so that the dial pointer is now correct, you have upset the tracking of that tuner gang in relationship to the other tuning capacitor gangs. This means that the front end RF amplifer circuit(s) is not tracking to the same frequency as the local oscillator, therefore possibley causing a reduction of RF sensitivity and a reduction of image rejection.
As I stated in my first posting, proper electrical adjustments of a tuner front end requires special test equipment including sweep frequency generator and frequency counter, scope, etc. Many FM tuner and receiver service manuals I have seen don't even cover front end aligment and sometimes state that factory service is required.
Lefty