Some time ago, I restored an S-38, which included building a separate box containing an isolation transformer with plugs and sockets. But the S-38 would not make a CW tone. It uses a hokey feedback scheme where a wire is brought near the I.F. amp to give some capacitive-coupled positive feedback. No matter how I adjusted this "magic" cable, it wouldn't oscillate.
I don't really care to fix it. I will never actually use this receiver for anything. These things are selling for about $40 for a clean one. Not worth advertising it and having to box it up and take it to UPS.