The Sega 32X has famously unreliable video quality, with some units exhibiting serious noise. Kevtris posted about this a few times on Discord over the last year, and I asked if he could share his solution. Kev pointed out that the problem is due to the 32X’s switching power supply, which introduces a lot of ripple noise. The fix requires swapping two capacitors:
C17 (470uF 10V cap) is replaced with a 2200uF 10V low-ESR cap. Maximum height of the cap should be 14mm otherwise it will contact the shell. Nichicon URY1A222MHD should be a perfect fit.
C30 (small SMD 4.7uF ceramic cap) is replaced with a 100uf 6.3V SMD ceramic cap. 47uF 6.3V may also work. Ceramic caps are low ESR
If you wish to dive into the circuit further, Sega published this service bulletin outlining more options.
32X Stock photography by Evan-Amos