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A couple more data points:
1. I tightened the cable via the plastic hex nut to reduce any slop in the linkage. No difference with the 'hunting' behavior.
2. The 'hunting' largely goes away at freeway speeds, above 60, which is where a person needs cruise anyway. So on the freeway, it works beautifully!
I will try replacing the tantalum caps anyway just for fun, and let you know what I find.
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