gush
Where is that speedo pic
Here's what's happening. Your neck pickup wire is braided, and that's an exposed ground. The capacitor's two sides are also exposed, but containing signal. When they touch, you're connecting the signal to ground and that's usually bad.
Normally with the tone pot all the way up, little to no signal is going through the capacitor to ground, and you retain your highs. When the tone pot is all the way down, all the high frequencies go through the capacitor, which also rejects the low frequencies. That means your higher frequencies are going through to the pot and then to ground while the low frequencies go out to the amp.
Since the exposed ground of the pickup wire is touching the backside of the capacitor wire, you're bypassing the tone control and making all the high frequency signals flow through the capacitor, straight to ground, just as if the pot was all the way down.
It's going to happen again and again unless you reconfigure the placement of the pickup cable behind the push/pull tone pot. If it's not long enough for that (looks like it should be but tight) then try to run it along the other side of the control cavity. Either way will work. The problem comes from having the exposed ground wire running across the exposed ends of the capacitor. You could theoretically start jumping around with the guitar and have the tone randomly alternate between tone all the way up and tone all the way down the way it is now.
I have circled the offending bits here:
Way to go John Beef!!!!
