Garrard 301-Worth the effort?

Have you checked out the Q-ing device? It may be bent. If the Q is preventing the LP from sitting down on the outermost groove, it can usually be re-adjusted (or in this case, straightened, if bent). Most have a set screw of some kind that permits height adjustment, altho I have zero knowledge of your specific TT/tonearm.

FYI, I was able to adjust the tracking force and correct the problem. The Ito tonearm has a sub-counterweight that screws into the rear of the tonearm. It is only supposed to be used if needed (for heavier cartridges).
I also learned that, if this Ito tonearm is resistant to movement, it id probably the vertical adjustment, not the tonearm's bearing.
Once I adjusted the tracking force and tonearm height, I learned how great this turntable is!
Before we set it up, my audio dealer (who used to own one of these H/K T-65C turntables) thought I would need to spend $1500 on a new table, like the traveller, to outperform the T-65C, but once we got it properly set up, he said I would need to spend at least $2500 on a new table to get better results. I am would be very happy with this TT if I bought it for $1200, but am estatic to have found one for $300.
I have learned a lot about setting up this table, so if anyone needs help with any of the H/K T series tables, let me know.

I had to fiddle with the VTA by loosening the allen set screw recessed at the rear of the tonearm base. The Sonata is a little tall so I had to raise the rear up slightly. Fortunately, the wood body can be used to square up the cartridge. I had to shim the cartridge to headshell to adjust the azimuth, again using the wood body as reference to perpendicular.
Have you noticed any difference using the lateral balance weight? I just bought a Jolida JD9 and it's been revealing my setup flaws.

HiFigi-
One other thing occurred to me. How high off the plinth does your platter sit and is it level? The platter and tonearm move as one assembly and if they sit too high the counterweight will hit the dustcover when the needle is dropped, especially if the spindle is set high.
My platter height is close to the plinth and the spindle is barely raised to make the front of the cartridge perpendicular to a 180gm record.
As much as I enjoy the T65C, the tonearm lacks a precise way to adjust VTA and Azimuth, something I will look for in future tonearms. The Sonata has been very sensitive to mis-adjustment, more than I expected.
Rich

Setting T65C VTA

I found a very easy way to adjust the HK T65C tonearm height/VTA using a deck of cards as shims. I could not believe the impact it had on the Grado Sonata1 cartridge. Night and Day.

I was able to find a spot just to the left of the tonearm to slip in some playing cards to support the tonearm assembly. After loosening the rear spindle height set screw, I could raise or lower the tonearm height by varying the number of cards (shims). In my case, 10 playing cards was ideal. Any more, the sound became sibilant, any less and the sound became muddy. By varying the number of cards, I was able to tune the VTA by ear.
My headshell was also slightly twisted counterclockwise upsetting the asimuth. As the T65C's tonearm lacks an easy way to adjust the azimuth, I used a thin paper shim between the right side of the cartridge body and headshell to align it properly.
I recently upgraded my phono stage and power amplifier and haven't been enjoying vinyl as much as I had hoped. I didn't realize how sensitive the Sonata was with regard to it's setup.