Hey pHEnomIC,
1st off, let me just say I'm not an expert or an EE. But I am more than happy to share my experience and help as best I can. Everything I share I have done and have not had any problems, but please use your due diligence and use safe practices with the high voltages present.
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Would be interested in the transformer modification.
Okay the transformer trick involves putting the secondary taps for the pre-amp power (BRN-YEL/BRN) in series with the primary side. You can do this temporarily by taking out your jumper from 1-10 and putting in two jumpers: from 1-3 and 7-10. Make sense? What this does is two things: one, it ties up the loose secondary wires that are not being used (used to send 6.3v to the preamp filaments) and two, it essentially puts a big resistor in series to drop the primary voltage closer to the 117v the transformer was designed for. After I did this on mine the transformer ran a lot cooler and all the voltages came down really close to spec. Before this trick the heater voltages were too high and the tubes were running quite hot as well as the B+ being too high. This trick was shown to me by one of the members over on the Magnavox users group at Yahoo.
That being said
it looks like on the schematic you posted that some mods were already done to maybe drop the voltages? If so maybe you don't need to do this. PLEASE only do this mod if you determine that it is necessary. I don't want to be responsible for damages to your amplifier because of mods already done to it. If you need I have a copy of the schematic that has the voltage specs on it (factory) and can e-mail that too you if you need to check it.
I would still highly recommend you take the Molex plug out. A jumper is just a temporary measure and if you take out the Molex connector you can wire in a switch, a fuse, and also wire in a grounded 3-wire plug (HIGHLY recommended because with an ungrounded metal chassis you're asking for trouble).
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Do i need to replace all the capacitors or do only certain ones (signal) matter?
If the multi cap can is still functioning you're ok for now but I would buy the caps to replace it because it will go eventually. It is close to 50 yrs. old. Modern electrolytics are really small and easy to tuck in the chassis. It's also a good idea to bump up the capacitance a little. But beware that one leg should remain close to the stock value. I can't recall which one but I think I have it written down somewhere what values I used.
Other than that replacing the 4 signal caps with quality ones is a nice thing to do. Again here you want to stay pretty close to the stock value to avoid oscilation.
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Btw, I would like to incorporate a subwoofer/lfe output for a powered sub. whats the best way to do this? I assume i could run both channels to the subs speaker level inputs but it dont want to add extra complexity to the path.
You really want to run your SUB-out from your preamp at line level. You want the volume controlled the same as your input to your amplifier. If you put sub connections on this amp all your really doing is drawing from the input not the output. Unless your talking about using speaker level inputs to your sub in which case I believe you're asking for a headache. The output transformers on the Magnavox were originally intended for 4Ω speakers. They do OK with normal 8Ω's but adding a second pair of speaker outs totally changes the equation. And I would be suspect running one set of speaker terminal to the sub then connecting speakers thru the sub would also mess with the impedance.
Hopefully I helped more than confuse. If you haven't already checked there are some great threads over on AudioKarma about these amps. Also you can join the Yahoo-Magnavox users group and tap into a wealth of information.
Unfortunately I just sold mine and shipped it out 2 days ago. So any questions and I am going by memory. But I do have pics of the underside I can send and I can look at the unmodified on in my garage to jog my memory.
-Dogwan