Update,
Ok, no vert damping pot and I have tried the monitor on a couple of other games (turns out I forgot about my Jungle Hunt board set) - in any event the lines are still there, they are not as bright on the Jungle Hunt (may also be due to there being some problem with the board set as there is no blue outputted).
Same on my Dragon's Lair game as this one.
Maybe an issue with IC301? I am thinking it must be something in the vertical drive section...