Review the Data East boot process here: https://www.pinwiki.com/wiki/index.php?title=Data_East/Sega#Data_East_CPU_Board_LED_Flash_Sequence_at_Boot_Up_When_Working_Properly

Where yours is different will provide a clue on troubleshooting the issue.

Move requested to modern area.

XPin here!

What are your voltages measured at the +5, +12, and -12 testpoints of the PowerSupply? This would be the top row of led's on the supply.

1) Monitor the 5V and ground on the MPU, test points are right next to the battery holder.

2) Disconnect the sound board to eliminate it, I'd pull the power connector and ribbon cable.

For that revision of the board the 5.6 is a little high but non-damaging. It would probably measure closer to 5.2V at the MPU. +12 is good but that -16V should be about -13.5.

I would definitely take the recommendation of eliminating the sound board from the equation. It is the only board in the system to use the -12. Most of the DE boards that I have provided tech support with regard to this power supply we had sound boards causing the issues. CAP replacements and a little bit of rebuild got things going again.

It will flash, then pause, and flash again. How many flashes in between pauses?

Can you take another picture with better light? This appears like you have alkaline battery corrosion, especially on the 40 pin CPU chip, and most certainly would be in the IC socket as well.

pasted_image (resized).png

Definitely has some battery corrosion.

You need new 40 pin socket for mpu possibly new 6802 chip or just cleaning corrosion on legs might work new battery holder or nvram and other general corrosion cleaning should be good to go after that

After further review game rom socket looks like it needs to be replaced

Replace.