Well, the story almost ends today, as i dont have more time but this is what i found so far.
1) It did record and plays exceptionally well, see video of what was recorded on it from an Iphone 6
https://www.youtube.com/watch?v=o2g3u2okLX8
The unit is temperamental !!! observations:
The volume does drop with a lot of background hiss, and motor boating at times, especially if i press the record. The fix is the pulse the red record button enough times until it goes away.
The record bias fires up most of the time, but not 100% of the time. I did resolder half the bottom of the PCB and especially all the osc coils and related components, seems to help.
So it seems to play well, provided i dont though the record buttom.
I though it was the head playing up, and resoldered all the connections but no difference.
ONE IMPORTANT point, when the volume is low i guess its oscillating, because if i tough the input at the head and send a loud 50hz pulse, the volume comes back !! This leads me to believe the ECC81's are the problem, as i had a Grundig radio where i had the exact same symptoms, and replacing it fixed it. (motorboaring, drop in volume, etc)
So until i get some new ECC81's that it for now.
PS: the sound is just beautifuil for such a small unit. !!