This was a fun one as it was very interesting problem. The game itself worked suprisingly. However, there were issues with the graphics.
To me, this looks like an addressing error, as the game is fine but the graphics aren't quite there. I figured that it was a problem in the decoding. As shown in the schematic snippet below, this 7442 helps control which ROM bank, RAM, POKEY sound chip, or the user inputs like the trackball.
Ultimately the bad chip ended up being this 7442. It's always nice when repairs are quick. Unfortunately, I don't have a way to test everything at the momment. For example, I don't have a trackball to test input with. I also didn't bother hooking up RGB since black and white composite was there through test points. Maybe there will be a second part depending on whether or not these things work correctly. Other than that, it just needs a burn in test, then it will be good to go.