First, I don;t assume that because I hear distortion that it is caused by the distortion circuit. Turn the distortion on, does it sound just like the unwanted distortion from when it is off?
Just an opinion, but I see shorting R112 as simply enabling pot R111 which can dial in the amount of gain increase caused by C105. Exactly as we might switch in a cathode bypass cap to up the gain in a tube stage. And shorting R126 just enables the other half of R111 as a tone rolloff. C115, C116 and that half of R111 form a simple tone control. SO as you dial up the gain in the earlier stage, this tone control rolls off some parts of the freq response to make it more pleasing. So the R112 part is involved with making overdrive distortion, the R126 part is simply a tone control, no distortion.
SO apply a test signal, are you overdriving any of the stages? Can't cram 20v of signal through this. Are any clipping? What does your distortion look like?
Have you replaced all those small e-caps like the source bypass caps? Q101, 102, 103 each have one, plus coupling caps C122, C124.