Hm... I have no clue as to what is causing that interference, but perhaps I could suggest a few more things to check.
Since you are using the ArcadeVGA card, I think it is safe to assume you are using a standard arcade monitor...
Look at the VGA cable and check for bent or broken pins where it meets the ArcadeVGA card (and the JPAC, if you have one). I can't fathom a technical reason why a damaged cable would cause that particular pattern, but hey, it's worth a look-see.
Boot it up using a PC monitor with a normal card. Is the pattern still there? If not, monitor or the signal to it is suspect.
Do the lines move in a horizontal/vertical/diagonal manner? I remember when I was a kid, the television would display a similar pattern when my mother ran the blender. Did you turn the air conditioner on for the first time this summer?
It may be interference of some sort. Try moving the cab across the room and plug it in to a different outlet...?
I notice that you are running XP on the cab. Use a DOS boot disk and see if the pattern is there at the C: prompt. (A longshot, but might be worth your while to try).
Well, I hope this helps a little, if any.
APf