This doesn't sound like an analog video error related to the A/V out on the console.
It sounds like was said, a damaged hardware component. All I can suggest is that you buy another, sorry
Also taking the machine apart, cleaning things up, and putting it back together could always work. It's a long shot, but worth it.
FYI I also had some odd 3D problems - in Jet Set Radio, transparent areas of sprites wouldn't render properly so all of the trees had big green boxes around them. The problem fixed itself.
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