Well, I think you really need to measure the voltages on the power supply to determine the cause of the reset. At the top of the power supply are some test points. I would be interested in knowing if 12 volts or 5 volts is a problem. If it is a 5 volt issue, then I would replace the C2 capacitor (100uf 25 volt electrolytic). If 12 volt issue, then you may have burnt pins on CN1, fuse clip problem with F1 or F2 or even the bridge rectifier is going out.
So you need to measure the voltages as it is the starting point to know where to look.
If 12 volts is ok, then the bridge rectifier is not the problem.
http://www.pinwiki.com/wiki/index.php?title=Data_East/Sega#Power_Supply_Issues