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This chassis does not have AGC, as many early sets didn't.
Therefore, the contrast control is the gain control for the tuner's RF amp, as well as the picture IF strip. It is acting correctly as you described.
The correct procedure for tuning a picture on a set with no AGC is as follows:
Allow set to warm up. Turn contrast and brightness all the way down.
Select the channel you wish to view (or feed your digibox on in this case.)
Advance the brightness control until a raster is barely visible.
Advance the contrast control until a normal picture appears with no signs of bending or pulling. Adjust fine tuning for best sound.
You may find it necessary to readjust the fine tuning for best sound after a period of operation.
The above procedure was pulled right from the owner's manual for an early Admiral set.
I hope this helps.
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