It definitely sounds like the PSU is the problem if it did exactly the same thing on a different A500. I'm guessing it isn't supplying enough power to actually allow the system to boot fully, and that could indicate some of the capacitors in the PSU are bad.
BTW, Stu is currently doing an PC to Amiga PSU conversion. Hopefully he will be able to post some pictures once it's complete as I think that will be very useful for Amiga owners as the systems get older.





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