SME 3009 S2 Improved Tonearm problem...possibly

It appears you have a classic case of cartridge/tonearm mismatch. Everything you're reporting (except the induced hum from the hex wrench, and that will never be an issue when using the cart). The Zephyr is a fairly low compliance (stiff) cart at 10 uM/mN. Your SME is a low-mass tonearm (~6.5 to 9.5 grams) when you do the math, your combination has a resonance frequency somewhere betwween 18-20Hz. It should be about 10Hz. The Shure V15-III has a compliance of 30 uM/mN and in your SME that yields a resonant frequency right at 10 Hz - just about perfect. Here's the reference link: http://www.analogue-classics.com/html/sme_3009___3012.html 

The solutions are either increase the effective mass of the tonearm by about 20 Grams (a big wad of florists putty?), Or find a compatible tonearm, or find a more compliant cartridge. You also might see if you an swap your Zephyr for an Aida High Compliance - they're the same price, but as the name implies the Aida High compliance is intended for low mass tonearms. It is also a high-output cart, so no MC preamp is required - just a regular MM phono stage. https://www.sound-smith.com/cartridge-compliancearm-mass-chart

Good luck.

I will talk with Soundsmith about swapping the cartridge possibly. However, they are the ones that recommended it to me.

This is the link they sent to me when I emailed them asking what do they recommend with my setup. I gave them all the details of what I had and this is what they sent to me:

https://www.sound-smith.com/cartridges/317/low-output

I'm going to get the table and arm 100% functioning correctly and then go from there. I am open to tonearm suggestions. I prefer something like the SME V with dial settings. Would that arm fit my table, Thorens TD125 mkii?

I agree with @dover re feedback coming the turntable, I had the exactly the same problem as you described and had to put turntable on a floor standing rack instead of wall mounted.

General rule for cartridges is low compliance cartridge use a high mass arm and vice versa.

Don't be fixated on arms with dials for downforce and bias always use a cartridge downforce gauge and do final adjustments by ear same for bias.

Peter Lederman sent me an email in reply to mine about the problems I'm having. He is the owner, designer and manufacturer of the Soundsmith cartridge that I own.

He stated after I asked if it was the wrong recommendation and he said, "lower internal mass makes a cartridge more compatible, not less."

I'm not going to question his statement or his abilities. He invented the Soundsmith Zephyr cartridge, so he should know more than anyone.

Anyway, he called me yesterday evening and said he felt I'm having a bearing issue. He said my description of my problem is a classic example of a bad bearing. So, I plan to replace the bearing with a nylon bearing as SME originally made the arm with. While I'm in there I'll rewire the arm as well.

@jebcamaro 

Its more likely the pillar bearings that are an issue rather than the knife edge bearing.

They often get worn and sticky, inhibiting horizontal motion - there are 2 of them inside the arm pillar.