I decided to use an external keyer temporarily to get around the no-sidetone while using VAC issue. When I get the case properly grounded and the balanced audio lines decoupled I will return to the on-board keyer and sidetone.
However, when I made the switch, even though the external keyer sidetone was indicating legit cw, the 7000DLE was transmitting constant dits.
I was a bit baffled until I was thinking about how my paddles were wired backwards (Murphy lives here), and I had to use the very convenient reverse paddles check box to make them work. Then I thought, I wonder if the reverse paddles button changes where Thetis looks for the keying signal in non-iambic mode.
Sure enough, when you check the reverse paddles box in non-iambic mode, Thetis looks for the keying signal on the ring and not the tip of the jack. Why it puts solid dits on the tip I don't know. But unchecking the revere paddles box resulted in normal operation.
I think this might be a bug. Maybe reverse paddles should only be active in iambic (internal keyer) mode. I apologize if this has been covered before, but I couldn't find anything in the archives.
73,
Bob K6GGO