That sounds like a single blink, which means no RAM detected, or RAM failed the memory quick test.
I didn't catch this earlier. The RAM LEDs are not the diagnostic ones on the backplane (logic board), near the power button. Rather, they are a bank of red LEDs on the processor board, near the RAM slots. If a RAM slot is empty, the corresponding LED should be illuminated steadily. ie - on a dual-CPU board like yours, if one stick is installed, you should get at least 7 red LEDs glowing near the RAM slots, one for each empty slot. You'll get 8 red LEDs if the stick you're testing with is bad, or poorly seated.
The RAM LEDs on a dual-CPU are visible in your pic above, with a CPU removed - between missing CPU and rear RAM slots. Look forwards of the rear RAM slots - there's a black power connector (thermal sensor plug for CPU A) coming up behind a black screw. The 8 LEDs are just forwards (left) of the black screw. They look like little yellow boxes when they're unpowered.
Edit: To clarify, it still sounds like a weak PS. But it's possible from earlier posts, you were checking the wrong LED bank for RAM tests. If the one RAM stick used for testing were bad, it would explain everything - before laying out cash for a PS. Seems worth asking about, just to be sure.