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My Early 2008 iMac shows no signs of life... No fan, no hard drive, no power on indicator; nothing. On tear down I find Diagnostic LED #1 blinks on and off. None of the other three Diagnostic LEDs are lit. I suspect a faulty power supply board. Am I correct with this diagnosis?
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most likely - the power supply is a switching power supply and often there is a problem with the big electrolytic capacitors. they lost their capacity over time or "explode" (the top of them are slighty pop-out). as the capacitors are bad - the switching power supply wont start, it just keeps trying to start but the feedback loop wont let it to start - this is probably the reason why the led is flashing.
so the capacitors are most likely causing the problems. if you got soldering skills or if you know someone who have, replace all the big capacitors with the same capacity and voltage ratings and it should work. if you cannot solder, just order new PSU board.
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mendykasr, sure sounds like it. Check the answer on this question The second diagnostic led is blinking after connecting to power for a full explanation of the LED's
by oldturkey03