Thanks for the reply mattsoft.
Yes the DAC was adjusted exactly as you say while the screen was blank (I waited and only made adjustments while the message 'DAC adjust' wasn't displayed on screen). In the end I think it was 0.002 volts - I couldn't get it any lower than that but I assumed that would be close enough.
I didn't think the test screens seemed too bad either but obviously something isn't quite right as the sprites (is that the correct term on a vector display?) shouldn't distort as they currently do. There is also some wobble on the lines on the test cart and I've also noticed on some games the screen seems to shrink and expand slightly depending on what's displayed. Without having a perfectly working unit to compare to it's difficult to know if this is normal behaviour. Text and some other graphics also seem to lean to the right, particularly obvious on the homebrew vectris game from the 'all good things' collection.
A cap replacement is something I was planning for so will probably change all the caps at the same time, hopefully that will fix it.
Thanks again for your help.