That is where I would start... maybe the switch when activated hit the power feed for the GI or controlled lamps? Something fed some voltage into the matrix and the game wasn't happy. There are a couple other IC's (7406 / 4049) in the path before the PIA so maybe it just affected them.
To test the switch matrix in the game, first remove both Switch Matrix connectors on the top right of the driver board. J2 is Column (green wires) and J3 is Row (white wires).
Then run a switch test from diagnostics, you should get no switches being sensed.
Use an alligator test lead as follows:
Connect one end of the test lead's alligator clip to the column pin, starting at column 1. That's the bottom pin of J2.
Then use the other end of the test lead to touch the appropriate row pins.
Start at the bottom pin of J3, which is row 1. You should see switch #1 indicated (R1C1).
Move the probe to the next pin up on J3, which is row #2. You should see switch #2 indicated (R2C1).
When you got to the top of the row pins, move the clip end to COL #2 (up one pin) and start again with row #1.
Activate each switch in turn by connecting the appropriate 2 male pins on the CPU board with your test lead.
Using your switch matrix chart from the manual as a guide, you may find the faults as your game "sees" on the same switches.
If you get an error in sequence, more than one switch registers at a time or you are missing a row or column - then you know the problem must be on the board. You can either try to fix it or send the board out for repair.
If the above test works correctly, meaning all switches register correctly then your problem must be the wiring or on the playfield.