Just finished a bunch of back & forth with Kingwa, and it is the same issue -- the μPC1237 chip needs to be replaced. I am guessing this is a common failure.
On eBay it looks like it's $12 for a new chip from a US seller, $7 for a pulled chip from a US vendor, tons for $2ish from Chinese vendors with different markings than the NEC chips, and $4 for a chip with the same markings from a Hong Kong vendor that claim it's genuine and in new condition. I'm going with the $4 chip and just wait the 2 weeks it takes to get here. Also, that daughterboard the chip is on doesn't seem to want to come out after unscrewing it -- is this just old wires that lost their plasticity or is there something (the headphone jack?) attached to the case soldered to the board?
For future reference, this is how you diagnose:
1. Short the following two points *with the power off*. If you do this with power on, you run a good risk of damaging whatever is connected to the output.
2. Turn the unit on, and see if the amp is "working" again. If it is . . .
3. Take the following measurements. I used one of the four screws in the picture that attach the card to the case as my voltage reference. Also, given the quality of my multimeter, I would not be surprised if these values are as high as 10% off.
I am not sure exactly what the correct measurements are, but given the following measurements Kingwa was 90% sure the chip was at fault: