Shower screen seems fine, but all suggestions are most welcome! I de-scaled yesterday - don't know why because it didn't need it, but I'm running out of things to try.

Well, all is once again good in our espresso world. The gremlins have magically dispersed and we seem to back on track to crema nirvana. I can only conclude that the fault was not one thing, but a whole collection of irregularities that all came together in one steaming nightmare. Let's go through it all, one at a time.
1) Steam valve issues - spring not seating correctly causing an irregular pressure release
2) Partial blockage in pickup tube right up where it screws into the group. Two lumps of unidentified stuff that dislodged themselves when I unscrewed it and tapped it on a block.
3) De-scale didn't appear necessary, but certainly made a difference when done. Didn't solve the problem, but added together with these other things seemed to play some part. I can only presume that the thermostat on the element (I guess there is one?) would not function correctly when caked in a film of calcified crap, even a thin film.
4) I re-shimmed our burr grinder. On re-examination it seemed that our grinds were not as fine as they should be. (Strange how when things change slowly over a period of time you don't notice right away.The old frog in boiling water principle). Anywho. Re-shimmed, and good to go.
5) AND I don't know what else. Rotated the seals on the piston so as to ensure they were not wearing unevenly on a wearing group bore?

Thanks to all who felt our pain, who contributed with some great ideas and hints, bottoms up to you all, and may the crema in your cup be velvet and rich, your lattes smoother, your long blacks longer and your short.....well, you get the picture.

Coffeesnob,
I was relieved to read this thread. I recently acquired an old (1970's I think) Europiccola which is exhibiting exactly the same behavior you described. I've asked a few espresso-techs what they thought the problem might be. Most suggested the grind was too coarse. I suspect that it may be a combination of factors just as you found. I currently have the group disassembled to inspect the gaskets. They look fine, but I'm going to replace them just to rule out that variable. I haven't taken appart the safety valve yet, but based on your experience I try that tonight. I've got every component polished and gleaming so hopefully that will provide the necessary karma (mojo?) to allow it to spontaneously start to work correctly. I just wish I understood mechanically what causes this phenomenon. Is yours still working?