You need to be more clear which game you are talking about. Your post title says Bally so I'm assuming this is the 1978 Bally Playboy??
Please identify the switch and what you mean by error? Are you saying the switch shows up in switch test as being stuck closed?
Since you tried cutting off the cap, what happens if you remove the wires from the switch?
In general you have either a shorted switch stack or the strobe or return wire for that switch is shorted. Unsoldering the wires from the switch will help narrow that down.
Knowing which switch will help with trouble shooting too.