IIRC, the blink speed, key repeat delay, and double-click speed are adjustable via a control panel. I suspect they currently have invalid values and setting them to one of the available radio-button choices will result in reasonable behaviour.
Wow, this answer is solid gold. Thank you!
Update:
Adjusting settings in the control panel fixes all issues.
Restarting the Lisa and keeping it plugged in the power outlet keeps the settings I chose.
But if I unplug the power and then boot it up again, we are back to "bad" settings (e/g/ no cursor speed is selected, hence the cursor blinks rapidly, the lisa prints multiple symbols per keystroke, double-click does not work).
I did the same test with the good I/O board:
If I unplug the power and then boot it up again, it forgets the last settings I chose, but it reverts to "good" settings (cursor blink speed of "2").
So why this different behavior on the good and bad I/O board?
Is there some Prom chip on the I/O board that keeps "good default settings"?
At positions 1B and 2B I see ICs "SCM21C14E" (1K x 4 CMOS Static Low Power Ram). I assume one of them is the PRAM that stores the control panel settings until power is removed?
If I can't fix the I/O board , perhaps using a MacWorks Plus II board would fix it, as it has "256 bytes of non-volatile EEPROM that retains Macintosh PRAM settings while Lisa is unplugged".