Here is what fixed my vertical collapse on my K7000 (copy and pasted from over at KLOV)...
Just picked up a working K7000. Installed a new fly and full cap kit. Fired it up and it looked great, got everything adjusted and all of a sudden the brand new flyback cracked and started arcing profusely. I turned the cab off immediately, removed the chassis from the tube, removed the flyback and saw this...

Damn thing was brand new. I've always heard about bad batches of flys but I've never ran into one. Well, looks like it happened this time. I re-installed the old flyback and when I powered the chassis on again, I got vertical collapse and then D13 smoked/shorted. So I replaced it, checked everything in that area, it all checked good and reinstalled/turned the chassis back on again. Poof! Fuse blew. HOT shorted.
So now I've got a lot more troubleshooting to do while I wait on the new HOTs I ordered to come in. ARGH!!

I got the Flyback from TwistedQuarter. I've ordered MANY cap kits/flys from them and NEVER had any issues. I don't even remotely consider it their fault. How could it be? As with all things electronic, you never know how long it's going to last. Regardless, I contacted them and told them what happened and I am awaiting a response. Hopefully, I can get a replacement but now I have a dead chassis that was working before that I have to fix. That's the most frustrating part for me.
On the vertical collapse issue, let me just say that I've never had a K7000 in VC that wasn't an IC issue but I have to wait until my new set of HOTs arrive (ordered 10 of them because I'm tired of never having any on hand) to start testing them. Oh well. First world problems.
Partial Success!!
I received my HOTs and some solder wick from MAT Electronics today. Started troubleshooting....
-) Re-installed original flyback.
-) Installed new HOT.
-) Critical Safety Cap(s) test good in circuit.
-) VR was shorted across pins 3 and 4.
-) Replaced VR.
-) R107 tested OPEN in circuit. Replaced R107.
Found no other issues so I re-installed the chassis and powered it up. It fired right up but my exuberance was short lived because it was in vertical collapse. Damn. What's next? IC1?

Total Success!!
-) Tested R101 and it's traces. Good.
-) Replaced C51.
Still collapsed.
-) Tested R91 in circuit. Supposed to read 1.2 ohms (basically shorted). Meter didn't ring so I removed it from the circuit to find that it was completely open and burned up...

-) Replaced R91 and gave everything else another good lookover. Fired the chassis back up and...BAM! Collapse fixed and back up and running. Maybe this will help someone else in the future. TwistedQuarter contacted me and told me they are sending me a replacement flyback from a known good shipment so I'll install it when it arrives and hopefully it'll be ok this time.
-) All told, the bad flyback took out D13, HOT, VR, R107 and R91 (either directly or indirectly).
