The other thing to watch out for is the screen syncing and the power light.
You need to watch out for the first screen sync where it initialises to a black screen, then it should make a slightly longer sync, visible on the screen momentarily. This happens when it starts successfully booting the kickstart. Yours probably doesn't do this, as if the reset line is being held low it won't get this far.
Have you checked all the traces around the SMT chips next to the battery? The tracks can look good but can actually have lost connection from the battery residue.
Changing the caps is one of the first things to do, though.
The CPU card is almost certainly fine. The CAPS LOCK procedure just checks to see if the CPU is active, not if it's working. The keyboard has its own buffer - when this is full, the caps lock light doesn't change any more. The CPU is needed to empty the buffer, so of course when the reset line is held active (low), then the CPU can't empty the buffer and the keyboard buffer stays full and stops responding.
Does Ctrl+A+A work, by the way?