Did you have any trouble getting the oscillator out, or was it just a
matter of taking the usual care with such things?

Tim-

I was considering purchase of a TS-520S, but it had a very similar problem when
I tried it. Unfortunately it was gone by the time I figured out how to get
into the VFO.

I found a service manual on the web, it may have been at http://www.mods.dk.
It appears that you only need to remove a few screws and front panel knobs, and
the front panel comes off with the VFO attached. I believe there is a co-ax
cable and a power cable at the rear of the VFO that can be unplugged, with a
single screw holding the shield to the VFO.

The way it acted was almost identical, working smoothly at the low end of the
band, but acting erratic above about 100 KHz or so. By the "feel" of it, I was
convinced that there was something like a wire that was touching capacitor
plates when they opened up to the critical frequency. However, the suggestion
that it might be a bad rotor contact, is also plausible.

Good Luck!

73, Fred, K4DII