Problem with ROG Tube Reamer

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I tried to build the Tube Reamer over the weekend and can't get it to work. It may be that I'm just too much of an amateur when it comes to electronics, but it seems to me that the layout creates a short between earth and output. When I plug it into my test box, the bypass stops working, so that seems to back me up.

The layout and schematic show lug 1 on the volume pot is connected directly to ground while lug 2 goes to output. Should I simply disconnect lug 1 from the board?

[induction]

No, lug 1 is supposed to be connected to ground.  This is a standard volume pot arrangement, lug 3 goes to the signal, lug 1 to ground, lug 2 creates a voltage divider that attenuates the signal.  If you disconnect lug 1 from ground, your signal will have no ground reference, which can cause problems (popping on bypass, among other things).

A screwy ground in the circuit wouldn't mess up your bypass signal in any case.

Your problem must be elsewhere.  It is usually be easier to debug if you look at the schematic, though trouble with bypass suggests that that it's not the actual circuit that is buggy. I would start by double-checking your test box, particularly the switch.