not sure about the leds.
but i have a mk2 board which i think is pretty much the same as nba jam.
the first LED iirc is sold that must me an power..
the 2nd one is sold when i first power up but then starts blinking like mad, iirc it stays sold when in service mode.
i skimmed the manual but did'nt see anything mentioning the led's board checks out fine though.
should also be one on the sound board, iirc the game powers up it will be off, then you'll hear a single "Tone", then the light will come on the sound board, a single tone means sound hardware is ok.
btw have you checked your dip switches?, probably not a issue but just make sure they're what you want and on teh full ON or OFF position.
you might also check the chips push gently down on them make sure they're completely seated..