The tremolo arm on my 2004 Deluxe Strat is very loose when inserted in its hole in the trem sustain block. Don't like dangling trem arms and this one is not threaded on the Deluxe and easily falls right out. Is there a retaining clip down in the hole pocket that has worn out? Or can you Strat colleagues offer any advice on how to fix this issue? Thanks.

OK here's what you do.
Remove the strings then the springs from the trem.
Take the tremolo unit out of the guitar. It should come out easily with no springs or strings keeping it in place.
Look at the back of the tremolo units inertia block (the lump of grey metal). There are two grub screws with allen key fittings. One of those allen screws controls how hard you have to push/pull to remove the tremolo arm. The other how loose the arm is when in the tremolo unit.

Set that the way you like it, put the trem unit back in the guitar. Put the springs back on the trem unit and claw. Put the strings back on.

Easy.

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No no and no

Thanks nikininja, I will make the adjustments, didn't even know these existed. Would suggest Fender add this content to standard manuals/print publications it ships with new instruments.