Leica III camera focusing problem

If you still have some vertical misalignment, then your original misalignment must have been pretty bad. For really bad misalignments, you have to get into the rangefinder unit itself and take off the left end coverpiece of the rangefinder unit in order to get at four screws that control the position of the 45 degree reflecting prism. The position of the reflecting surface of this prism controls the direction of the secondary image relative to the primary image, (the main image you see straight ahead in the viewfinder, the one not influenced by rangefinder focusing). Adjustment of any one of the four screws will move or tilt the secondary image in three possible ways, up or down, left or right, and back or forward. So, you need to know what your doing, and be able to pre-visualize what direction the image will move when a particular screw is either tightened, or loosened. It's not for the faint-at-heart, or non-mechanically inclined. Of course, you can only get at the rangefinder unit by removing the top chrome cover, which is a whole story of it's own.

Yes, if the vertical misalignment is small, say, about less than a tenth of the image size that is misaligned vertically, then try rotating the 'lens' that covers the front left (as viewed from front of camera body, in upright position) rangefinder window.That is, the front RF window near the slow speed setting dial. In order to do so, you will need to unscrew the decorative chrome bezel first. Unscrew in counterclockwise direction. Do not use pliers, etc. to remove bezel, or you will possibly distort and/or mar the chrome finish. Instead wrap bezel with two, or three layers of making tape, making certain masking tape is not contacting the body of the camera, but only the bezel. Usually, bezel can now be unscrewed by hand only; if not, use pliers gently with the masking tape acting to protect the bezel's finish. Once the bezel is off, the lens (it's actually a glass wedge prism) can be rotated using the prongs of a tweezer inserted in the two notches of the brass ring encompassing the 'lens', or glass wedge. First, rotate in both directions, cw and ccw, in small angles to determine which direction and how much wedge rotation is required to bring the two rangefinder images into coincidence vertically. Reassemle in the reverse order.