Yes, disconnecting the global feedback has removed that oscillation type distortion and yes the output increased.
Excellent!
It is feedback instability then. Try playing with a higher value for R314, maybe doublei'sh or more in combination with C306.
Before that, you
might want to optimize the biasing of the transistors to reduce crossover distortion a bit (negative feedback will reduce it further). Increasing the values of R307 and R309 (as you already have) a little further, while watching the crossover distortion. If you do then the following cautions apply:
Don't run the amp with R307 and R309 disconnected as the transistors will turn hard on and blow something. Don't get to the point where you see any voltage drop across R312 or R313 - There is no temperature compensation for the output transistors so as they heat up, their Vbe goes down and they could go into thermal runaway. Also, you will start to see offset on the speaker output. Do any tweaking with the speakers disconnected until you're sure there's no offset.
It's up to you how far you want to go in search of lower distortion - Having written the above, it's probably wisest just to get the global negative feedback stable by playing with R314 and C306 and leave it at that - especially if it sounds nice anyway.
(Sorry, bed time).
@Ewald1963: Good idea - the frequency of oscillation should give some idea of which way the stability is going, particularly in respect to the value of C306.