[jb welder]

It has a series FX loop which is the 'access in/out' jack on the back. All series fx loops are notorious for causing this kind of symptom.
It does sound like a thermal issue but that can also cause the switch in that jack to act up.
Try plugging in and out of that jack a couple times in case it will self clean from some exercise. Or if you have a TRS (stereo) cable, plug one end in there and short the tip to ring on the other end. See if that helps.

 

[jb welder]

It is critical that all the output transistors have mica insulators between their casings and the chassis.
The output transistor sockets are on the inside of the chassis, the output transistors mount on the outside of the chassis. The chassis itself is used as a heatsink.
The transistor casings are the collectors, all of which have voltage on them. The chassis is grounded. The mica insulators prevent the collectors from being shorted to ground (which would let the magic smoke out).

 

[jb welder]

Does your amp have the case insulators installed on the power transistors?
View attachment 388630

Those are there to protect the user from the voltage on the transistor casings. Mica insulators are still required between the transistors and the chassis.

If all (or any of) those transistors weren't properly insulated wouldn't something a bit more drastic be happening than volume drop and distortion? I mean been there, done that, blew the power supply (in this case most likely one or both of the fuses as the power rail just pours into ground?).

Usually this is correct. But you can still have broken or missing mica insulators and the heatsink compound (and in this case chassis paint) 'mostly' insulates. Then the paint or heatsink grease can act like a resistor and you get some leakage through to chassis and they might just run hot. Not necessarily the case here but it's easy to check that they are in place and not damaged/cracked.