That is good... you are going to need schematics. Its going to be difficult to remotely go through this whole thing, but you gotta start somewhere.

Unplug every connector in the backbox, and lets start from the beginning.

Plug in the connector in the bottom of the small power supply board. Take readings on the 5 volt output on the top of the small board... what does your 5 volt read?

Okay, look at your schematics for that bottom connector on power supply board, what are your measurements on those pins? Pull off board to take measurements.

Those voltages look okay... ohm out all the resistors and see that their readings match the schematics. Plug that lower connector back in, and try turning the adjustment pot... see if you can get the 5 volt output to move at all on the upper pins coming out.

Those all check out... at this point, it sounds like your lm33k may have gone south.

Do you get any output on pin 3 of that voltage regulator?
Are you using a ground strap as your grounding point for your meter?

Yep... and your ground point is fine too....

Yep... it appears that way. I have rebuilt 4 or 5 of them. Since you are replacing components, you might as well replace everything on that board. I think it will set you back about 11 bucks total.

Only other thing I would add.... make sure all your traces are good. Meter them all out. You have the right voltage going in, and nothing coming out. It would stink to order everything and find out you had a bad trace.

Also, I built a Mouser project cart for this power supply a few years ago....

If you want to save some time
https://www.mouser.com/ProjectManager/ProjectDetail.aspx?State=EDIT&ProjectGUID=a77eb293-9073-483c-825c-8903b3b4d094

To note, I used a through hole lm338 instead of the can....

No problem. It has been a few years, so I am not sure if everything in the project is still there. Also, disregard the quantity... I just order more than needed all the time from there.

Yeah, those are getting a bit tougher to find at a decent price. Especially the can version that was original to this design.

Nice... now plug in 5 volt connector to top of power supply, and only plug in the connecters/ribbon cable for just the cpu board and dmd driver board above it.

All the other connectors stay unplugged on the other boards.

System 3 DMD games only need the CPU and DMD to talk to each other to boot.

Yep, you got it...

This sounds like classic U8 GAL malfunction, but to be sure- Go through your schematics and verify all three of those connectors you just plugged in have the proper voltages at each pin.

When the boards are working properly, they will alternate flashing when talking.

Also, looking at your pics.... its hard to tell if a cap popped on you, but the left blue cap and the resistor above it look smoked...

Can you post a schematic for that connector? It has been awhile since I have had to bring a System 3 back from the dead.

What does pin 9 on the bigger connector read? Also, pin 5?

It sounds like you have some voltage issues not allowing that dmd controller to boot. My guess is you smoked the 20volt rectifier in the cabinet amongst other things. This 20 volt goes to the driver board and the dmd controller. (This is the one you are getting a 1.2 reading on)

Clay has a decent explanation here-
http://www.pinrepair.com/sys3/#ps

Also in regards to the connectors on the dmd controller- the larger one (where I had you measure) is the connector providing voltage to the dmd controller. The smaller one provides voltages from the controller to the dmd itself.

Being that you have a solid line going through the dmd, i believe your high voltages are fine. The logic voltages are off right now. Your 5 volt is good, your 20volt isn't.

Does that make sense?

Probably just the bridge. Instead of guessing though, you can test a bridge with your multimeter to verify functionality. These bridges are facing up, making them easy to measure.

Swapping the two connectors I think got swapped will do quite a bit of low voltage damage.

Too bad you arent closer, we could pop through it pretty quick.

The drivetrain on these System 3s are pretty straightforward, and I actually like System 3 schematics better than any of the others out there.

No problem.... good luck with surgery, don't over-do it.