Here is something from pinrepair.com that might help. http://www.pinrepair.com/bally/babypac.htm
"3rd Flash.
After a pause, the 6809 CPU chip at U8 attempts to test the program EPROM at U12. This is done using a chksum routine. If the chksum is correct, the third LED flash is shown. If there is no third LED flash, the EPROM at U12 is bad (or its socket or a trace is broken going to U12)."\