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.
If you wish to dive into the circuit further, Sega published this service bulletin outlining more options.
32X Stock photography by Evan-Amos