To restore high frequency receiver audio response, replace C-103 on the main unit with a .0022 uf mylar capacitor (that's 2200 pf).
To restore low frequency receiver audio response, replace C-106 with a .22 uf mylar capacitor.
To eliminate the distortion in the transmit audio, install a 4.7k ohm resistor inside the microphone case, in series with the white lead coming from microphone element. Once the resistor is installed, set the DTMF level pot to the middle of its range (this pot is the only one inside the microphone case). To complete the mod, set R88 inside the radio to the desired "mike" level.
To improve the receiver's sensitivity, power output, SWR at the radio, and reliability, remove the RG-58 pigtail and the UHF connector extending from the rear of the radio. Install a BNC chassis mount, screw-in connector (UG-1094/U) in the hole left in the back of the radio. The new connector will fit so well it will look like the modification was done at the factory.
To greatly reduce chassis heating in the receive mode, remove the following components: R66, R67, R68, Q32, D42, and D44 in the main unit. Install a 7808 (3-pin voltage regulator) on the transmitter power amp shield behind the space reserved for the optional voice synthesiser. Thermal compound is recommended. Hook the input of the 7808 to the point where R67 and R68 used to connect. Hook the output of the 7808, in series with a 1N4001 diode, to J14-1. The cathode of the diode goes to the connector and the anode goes to the 7808. Be sure and bypass the input and output of the 7808 with a .1 capacitor to be sure the 7808 doesn't oscillate.