A B727-200 WAS DISPATCHED IN NON COMPLIANCE WITH YAW DAMPER REPAIRED AND CLRED BUT CB'S AND PLACARDS NOT RESET OR REMOVED.

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WE ARRIVED AT EH ACFT TO FIND THE APU RUNNING AND BEGAN OUR SETUP. HAVING FLOWN THE ACFT ON THE PREVIOUS DAY; THE FAMILIAR ORANGE STICKER ON THE YAW DAMPER MEANT WE SHOULD PREPARE FOR A YAW DAMPER INOP FLT. THE COCKPIT WAS FULL OF DISTRACTIONS WITH THE GATE AGENTS; FLT ATTENDANT BRIEF; AND MAINT DEALING WITH THE APU SITUATION. WE PROCEEDED TO FLY THE ACT AS IF THE YAW DAMPER WERE INOP. DURING CLIMB OUT I QUESTIONED THE ALTITUDE AND AIRSPEED FOR THIS LEG DUE TO THE YAW DAMPER INOP. I CHECKED THE FLT PLAN; AND IT WAS NOT LISTED AS AN LIMIT ITEM; AND ASKED TO SEE THE MAINT RELEASE. THE MAINT RELEASE INDICATED THAT THE YAW DAMPER HAD IN FACT BEEN CLRED AND SIGNED OFF; IT WAS THEN WE NOTICED THAT THE YAW DAMPER ENG LIGHT WAS OFF AND THE APPROPRIATE CB'S WERE STILL COLLARED. THE FLT PROCEEDED WITHOUT INCIDENT. THE COCKPIT DISTRACTIONS AND MISLEADING MAINT RELEASE LED US TO BELIEVE WE HAD AN INOP YAW DAMPER. HOWEVER; THERE WERE CLUES THAT WE SHOULD HAVE CAUGHT. THE FLT PLAN (ALT/AIRSPD) AND LACK OF LIMIT ITEM; THE CB'S COLLARED; AND THE ORANGE STICKER STILL IN PLACE WHEN IT HAD BEEN CLRED.