The PAL-M is a misnomer, M refering to the 4.5 MHz intre carrier gap between video and sound with the RF modulation, so lets forget about the M for the moment please. Its not a recognised TV standard.
We are basically talking about PAL - NTSC conversion. MKL is the resident expert on this.
I don't see the picture but if you look at the Sony CXA1145 in the top left part of the board you'll see two jumpers marked NTSC1 and PAL2. If the system is set to PAL the NTSC1 will be off and the PAL2 will be on. You'll have to reverse things if you want to make it NTSC. You'll also have to replace the crystal (that square silver thing) with a 3.57MHz one (the one you have now should be 4.43MHz). Also check the PAL1 jumper location in the top right part of the board: if the jumper is there remove/cut it (it's for the 50/60Hz thing).
edit: OK now I see the pic. Your "open" (NTSC1) must be closed and "closed" (PAL2) must be open.
That is the correct crystal, on your piccy bottom left of the xtal you will see a variable capacitor, trimming that may fix this- but before doing so I would wait for MKLs opinion. I confess to be no expert on home systems.