I've had some nagging problems with my Kiss before but was able to remedy all of them. Today it is 100%.
If your lamps are on but do not strobe during test mode, the first thing you need to do is to replace all the contacts in the MPU connectors. In addition, you need to replace all the rest of the connectors too.
Most-likely it is MPU connector J1 as mentioned earlier. But don't take the easy way out and attempt to reseat them and then give up or just rebuild the one that is currently giving you problems or you will be revisiting another connector-related issue in the future. Reseating usually doesn't work if the connector is shot. If it does work it's just a temporary rig that won't last.
Even though the person you bought this machine from claims it was "restored", from the pictures it looks like he only replaced the bare minimum of stuff he needed to get it up and running. The one thing he did that does look good was to replace the rectifier board with a nice aftermarket one. Originally this was the weak link with Kiss.
Here's the not-so-secret "secret" to getting old Ballys like this running reliable and not have to mess around with it again.
Replace ALL the connectors with brand-new inserts. After 40+ years they are always shot. Marginal at best.
Until you bite the bullet and replace all the connectors you will be pizzing in the wind trying to fix this thing. Don't waste your time buying anything else until you rebuild the connectors.
Here's a place where you can buy the stuff to rebuild all your connectors including the crimper tool:
http://www.bigdaddy-enterprises.com/
It takes a little practice to get good at re-terminating the connectors but after doing a few you'll get the hang of it.