Hi Bob,
Welcome to the forum.
Try cleaning the headphone jack with some contact cleaner. Don't spray it into it but rather, wet a little brush or pipe cleaner with the cleaner (something like Deoxit D5) and keep moving it around in there till it comes out clean.
You should be able to adjust the headphone out level with the Output level for the machine.
It's a good idea to "work" all the knobs and switches by rotating or switching several times. Listen as you do this since you'll move the grime and oxidation (which will make a scratchy sound). Don't forget the playback head switch (1/2 to 1/4 track) since that one tends to be a trouble spot.
I also suggest that you do a careful cleaning of the heads and all the guides that the tape comes in contact with. Just use high percentage alcohol and some swabs. For major cleaning jobs, it's best to lay the machine on it's back, get a bright light and a magnifier of some sort. Pay close attention to the edges (in your case, the inside edge since that is the right channel).
Any gunk on the tape path will
lift the tape away from the head and cause "spacing losses" which could easily result in the 20% loss of signal you're experiencing.
Speaking of which, you mentioned that the tape that you used to test is 30 years old. The loss of signal could be caused by issues with the tape just as easily as with the machine.
Get yourself some new tape (RMGI or ATR Magnetics) and do your tests with that. If the tapes you have happen to be something like backcoated Ampex/Quantagy, toss them. Many of the backcoated tapes from the late 70's onward, had a problem call Sticky Shed Syndrome. And unless these tapes have important recordings on them, they're more trouble than they're worth.
Slow rewinding is a symptom of Sticky Shed and eventually will stop the machine entirely. You may need to use something stronger than alcohol to clean the gunk these tapes leave behind. If you have something like Naptha, that seems to do a good job. Or if you're going to order some tape anyway, US Recording Media has head cleaners that work great. Don't expect the stuff from sticky tapes to clean right off. Sometimes it takes cleaning 5 or more times to get all the gunk (especially in the corners of the guides). Just a tiny speck can slow down a tape or make it squeal.
There are adjustments for the brakes on Otari's. I suggest that you try the cleaning before jumping into that.
Here's the link to US Recording Media;
http://usrecordingmedia.com/You should also check out the "Beginners Guide" and "Links" located above the General Forum in stickies.
