Diag LED 1 blinking, but also with new PSU

Hello, I have this second hand iMac that keeps blinking the first diagnostic LED. It’s blinking slower when I’m holding the power button. I’ve tried to resolve the issue by replacing the PSU, but this didn’t help. All capacitors look normal, but had some white discharge on the opposite side of the MLB. I’ve also cleaned this, reseated the CPU and RAM. Nothing seems to work. Any ideas what could cause this issue?

I’m looking forward to your input. Thanks in advance.