The watchdog is a simple circuit that if not perodically accessed by the CPU will smack said CPU over the head by activating the reset line. The idea is that if the CPU doesn't boot up properly to reset it until it does. Well, sometimes it never comes up so the watchdog is smacking it like a little bitch that never does what it's supposed to. It's the chip version of Machismo.
With that said...
+1 on the physical damage. It's the biggest cause of issues on the old boards IMHO.
Look for broken caps or resistors in the reset circuit. These will cause the reset circuit to be totally dead though - not watchdogging.
Corrosion on chip legs, corrosion in sockets, liquid damage, rodent fecal/urine damage, gouged traces, leaking batteries, bent pins on socketed ICs, bent pins on surface mount chips, popped pins on surface mount chips from board flexing, and the list goes on.
Beyond that, +1 on physically failed components. Crappy sockets, crappy resistor packs, and failed capacitors that have dried out or split their tops are clear problems.
Whenever I work on a new board the first thing I do is to check for physically failed items.
Next, look for heat damage. Discolored tops on chips, cracked tops, chunks missing from audio amplifier chips, and any chips that burn your finger when touched. The CXK5814 SRAMs on the Neo Geo boards have a tendency to burn your finger when dead... and they have dark spots in the middle too which give you 2 clear indicators as to which one is the bad one.
Once all that is done and the game is still in watchdog the next step is to pull the ROMs, read them in a programmer, and compare the 32 bit checksums to what is posted in
MAWS. Replace any bad ones and check again.
Next is to start poking around with the logic probe to see what is going on. What is the reset line doing, what are the address/data busses doing, and what are the CPU control lines doing? What are they doing on the EPROMs? What are they doing on the Work RAM? If the enable lines never activate on the program ROMs then you have an address decoding problem. If the address or data bus lines look trashed then you may have a CPU or interface chip problem with the address bus buffers or data line latches.
RJ