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I recall those well. KD-500 was a relatively inexpensive deck made of a concrete resin material.
... Your's probably came with a G-707 arm (I still have one in a drawer). The 707/747 worked well with Sonus (née ADC) because of the latter's high compliance. Blue was rated high among MM cartridges.
...SME was always a standard.
...I never heard a bad Denon MC. The 'D' model always appealed to me.
For reasons I don't know, I never owned a Grado. I ought to correct that.
My first TT was a Philips GA-212 with an ADC XLM cartridge. That arm was sort of a joke. That's why I got the KD-500 with, as you correctly surmised, the G-707 not long after it debuted.
An engineering student friend down the hall in the dorm at Purdue back in the late 70s got me into audio. He had a Linn LP-12, SME 3009 II, and an Ortofon MC with transformer. His "dorm system" used a JE Sugden pre-power amp and JansZen Z410 hybrid electrostatic speakers and an HK Citation tuner, too. Serious stuff for the day! He had the Quad ESL-57s at home. It goes without saying, he had good summer jobs.
He sold me the Sudgens and JansZens then bought some LS3/5as, a reworked early 60s Fisher tube pre (that had a knob to select various LP equalizations) and the Quad tube power amp.) My dad always said he didn't understand how that dorm didn't just float away in the summer when all the audio gear was gone.
My SME was that goofy 3009 Series III with the tray that held silicone fluid and the various sized paddles for adjusting the damping, plus way too much play in the knife edge to remain properly aligned. As J. Gordon Holt noted in Stereophile "it is also one of the most tedious to set-up because, since every parameter is adjustable, every parameter must be adjusted." Fancy way of saying it is a massive PITA, I guess.
I got it when I switched from the Sonus to a DL103D. That cartridge sat in a box for decades before I sold it a year or two ago on eBay to someone who wanted one to rebuilt/retip. The SME likewise was in a box until I discovered Audiogon and sold it maybe 15 years ago for nearly what I had paid for it.
When I got tired of the SME being out of alignment all the time I bought the most inexpensive FR arm, which remained on the table for over 20 years until I traded the rig in for a NAD C320BEE for a second system that's been gone for years now.
The Denon had been in the FR for ages when my Marcof PPA-1 pre-preamp crapped out, which was a number of years into the digital age, so I bought the most inexpensive Grado Signature cartridge available just to have something in the arm that worked. I used the Marcof enclosure to DIY a two input passive volume control with an ALPS Blue Velvet. It's much thicker and heavier than most aluminum project boxes. LOL.