After staring at this for way too long, my best theory is that Q502 (the PNP transistor) is busted. It looks like all of the current from the emitter, plus some from the collector, is going out the base to ground, dropping about 13V of the 34.3V across R508 (which is why the voltage there is much higher than you'd expect if it were being determined by the R507/R508 voltage divider alone).
Basically Q502 is not acting like a transistor at all. And with conventional current flowing into the collector of Q502, base voltage at the base of Q501 never rises, so the positive rail never rises and is stuck at the 38.4V you measured.
One way you can test my theory is to remove Q502 from the circuit, and then measure the voltages across R507 and R508. They should add up according to the voltage divider rule. I'd expect about 53V across R507 and 63V across R508.
My understanding of the circuit (how it should work)
If the circuit were operating correctly, Q501 would initially be off; the ~170V across C503 produces a current which flows through R506, the emitter-base of Q502, R508, D504, and finally R509. Since Q502 is forward-biased, it begins to turn on, and current flows from its collector into the base of Q501. As Q501 turns on its resistance decreases and so the voltage drop between the +140V rail and the negative end of C503 decreases... which means the voltage on the positive end of C503 increases.
The voltage continues to increase until D502 becomes forward biased, which holds the emitter of Q502 at ~141V, and the base at ~140V, and therefore (by the voltage divider ratio) the rail at close to 260V. If the output voltage begins to rise, the base of Q502 will also rise, turning it off (because the emitter is held at 141V by D502), so Q502 will also begin to turn off, increasing the resistance and voltage drop between the negative end of the capacitor and the 140V rail... which will reduce the positive end of the capacitor the same amount until the base of Q502 is back to 140V. The regulator action works similarly in the other direction.
In this power supply, D502 + the 140V rail act like a voltage reference, similar to the TL431 in the 140V supply (see /u/petemate's description)
(I know I've not managed to explain the circuit very clearly... let me know if you need me to clarify anything.)