IMPORTANT NOTE: There are several different versions of the A500 PCB: Rev 3, Rev 5, Rev 6A and Rev 7 (The revision number is printed on the top of the main board in the front right corner). Installation differs depending on the PCB revision:
1> For Rev 3 and Rev 5 boards, the 2.04 ROM IC must have pin 1 jumpered to pin 31. This connects A17 (pin 1 on the ROM chip) to A17 (pin 31 from PCB). Align the jumpered 2.04 ROM with socket U6, and press firmly into place. Check for bent pins.
2> For Rev 6A and above, cut or remove any jumpers from the top of the chip. Align the 2.04 ROM with socket U6 and press firmly down into place. Check for bent pins.
From Software Hut's Resource page on their website.
I agree that you should just upgrade to 3.1.
And for 3.1 here is what needs to be done:
1> For Rev 3 and Rev 5 boards, the ROM socket must have pin 1 connected to pin 31 and the ROM IC must have connected pin 21 to bent-up pin 31.
2> For Rev 6A and above, the ROM must not have any connection.