So I managed to find the time to desolder the CIA chip (U8) and... it works! I now get to the KS start screen.
So does this mean that the 8520 ic is definitely broken or can it still be some of the surrounding components? Maybe I should buy some more broken Amigas just to get some parts.
All PCB tracks look perfect in that area btw.
Edit: Just attached a HDD and it boots up WB just fine. Mouse+audio also worked perfect, unlike my other A600 which had a few problems in that area.