  We consider finite-k electron-phonon coupling appropriate for a
superconductor with a very short coherence length and local intersite pairs.
  From group theoretical analyis we find that phonons with nonzero k can couple
to degenerate electronic states in LaSrCuO and a Jahn-Teller-like distortion is
found to be operative for E_u and E_g -symmetry O states. Experimentally
observed anomalies in inelastic neutron scattering, ESR and EXAFS are found to
be consistent with such an interaction of the tau_1 symmetry Sigma point mode
with the planar O p_x and p_y states. The proposed interaction is found to
naturally facilitate symmetry breaking associated with pairing and/or stripe
formation.
