First I'd recommend to check MPU power to make sure it is in spec (even though supply replaced)
MPU 1J17 Pins 4,5,6 = +5.03 VDC @8.1 mV AC ripple
MPU IJ17 Pin 9 = -14.04 VDC (Unregulated)
MPU IJ17 Pin 8 = +12.02 VDC (Unregulated)

Check power on reset circuit:

To "go around" the POR section of the board, you can do a simple test. After attempting to boot the CPU board, ground the /RESET line on the CPU chip (pin 40 of U15) momentarily with a test clip. If the board boots up consistently without a problem (correct flashes or "0" in the LED), then the POR section is definately at fault.

The POR section's job is to look at the +5 and +12 volts, and make sure they have stablized, as determined by zener diodes ZR1 (1N5996A, 6.8 volts .5 watt) and ZR2 (1N5990, 3.9 volts .5 watt) before starting the CPU. This is done by transistors Q34, Q36 and Q38, but before these three transistors can work, capacitor C30 and resistors R55 and R56 provide a delay to allow the voltage to stabilize. Only then the /RESET line can be released.

From there, see "3f. When thing don't work: Fixing a Dead CPU"
http://techniek.flipperwinkel.nl/wms11/index2.htm

Yes it uses LED indicators - but it still has a power on reset section. In any microprocessor system the first things to check on a non booting system is power and clock.

If i am reading that correctly, that information is incorrect. System 11 uses a 6808/6802 CPU. The reset pin needs to be HIGH ,not LOW for the CPU to run. It also seems like a bad idea to try and force the reset high... would try and fix the reset circuit instead. If you did the test while the reset was actually working and you forced it low, you could have blown out the reset circuit. Whatever is driving reset, might not be happy with forcing its output.

If the reset pin of the main CPU is LOW. Pull the CPU out of the socket and check that pin again at the IC socket. If it is now HIGH with the CPU out, get a new CPU to try. If it is still LOW, trace out the reset delay circuit. It is probably some staggered transistors and a capacitor.

I am still stuck at the fact the main line fuse blew out. Perhaps when the MPU board shit the bed it turned on every solenoid and lamp and that is why the main line fuse popped?

Yes, the reset is high during normal operation. The reset pin is active low, and must be held low for a predetermined time period as power is applied. This allows the processor to stabilize the internal circuits correctly as the power reaches the correct level. I think the guide is merely saying to simulate this action of the POR circuit by holding it low briefly. and then releasing pin 40 from ground should allow the pin to return to high at which time the processor would then run normal.

Yeah, pin stuck on low is not good.