Incorrect colors can have various causes. In order of probability: bad JAMMA contacts or wiring, split SCART cable, monitor failure, damaged video DAC, bad palette RAM, cut traces between GPU chips (check P bus)...
The color test screen in the system ROM menu can help diagnose problems (burned DAC resistors...).
Example screenshots are from Blue's Journey.
To do: System ROM test mode monitor test screenshots.
One missing color
Two missing colors
Three missing colors
Enjoy the sound :)
Shorted color lines
This can give very weird colors, since outputs will "fight" with varying strengths.
Rolling or distorted display, most probably a bad contact. If not, check SYNC.