It could be a loose jack in the guitar/loose wire attached to it. Sounds like the input jack got fried with that blue color thing going on. It depends if it's a "surface mount" jack, meaning it's directly soldered to the main circuit board, or if it's attached with wires.
Surface mount, screwing with their solder bath wiring...No Effing Way.
That's why I play all point to point hand wired amps, such as this gratuitous Marshall stack display currently in my pool room.
The 67 stack on the far right used to be owned by Brian May of Queen, then George Lynch of Dokken (he's a client).
The nearest one is a 68 Marshall stack. The one in the middle (purple) is the prototype cabs for Steve Stevens of Billy Idol in 2010. The others are more unobtanium pieces...
The placement of these cabs & amps were my wife's idea. You want to know the definition of a keeper? There you go.