C2 (100uf 35v or 50v) electrolytic cap is leaking. It is best to replace at least the other smaller capacitors with C2, but I suggest all the capacitors on the power supply get replaced.

You definitely do not want to keep trying to power it up. I had found long time ago, if a DE game with a shaker motor, has the 5v dip down to something less than 4v, the shaker motor will still try to turn and then it will also blow out 3 or 4 fuses on the PPB board as well.

As you can see in 4.5.3, one or 2 of the other smaller ones can leak and cross between two high voltages and then you have that magic smoke.
http://www.pinwiki.com/wiki/index.php?title=Data_East/Sega#.22Arcing.22_on_the_520-5000-00_Power_Supply

C2 when it leaks is basically starts eating the trace/pad under is and then it will cut the 5volts completely to the other side of the board. Picture of this is in 4.5.4 I have yet to see a failed LM723. Typically, the larger ones have been good except when the top of the cap puffs out. Proceed with caution replacing the larger ones as they are snap in caps, so the leads are a tight fit in the through holes.