Really sounds like a bad filter capacitor, but since you have a new power supply, it is unlikely. Maybe you could try replacing the two electrolytics near power connector on MPU board.

Also, since you can start game but displays are not working, you could try some cold spray on display control chip U6 (10788) and see if that triggers the error even after some successful power-ups.

Have you verified the exact voltage coming out of the power supply board?

Did you take the plugs/harnesses off and clean any of the contacts and pins?

Have you repinned any of the connectors?

Repin display and CPU connectors before you spray anything. It's a pita, but it works miracles on System 1's.

Assuming it's a factory CPU board, inspect the finger connectors for wear. Most all do have wear by now to some degree. Power supply fingers are most likely to be worn. If any are too worn, get a new board. CPU board also handles video.

Good points on the connectors. They really cause most System 1 problems.

Cold spray is used for 1-2 seconds. If you try it, first let the game warm up so that it always starts correctly. Then turn off power, use cold spray on U6 and turn on again. If it now fails to display correctly U6 might be the problem.