OK, here is more information on this.
If the system comes up on CPU 0, it works and with CMOD, you can switch the TSW system from 0 to 1 and they both work. When you boot the system on CPU 1, it says both TSW 0/1 systems are in make-busy, unusable and you can't use the system.
Also, if you boot up on CPU0, and everything works, and you turn on CPU 1, and then try to CMOD from CPU 0 to CPU 1, the system will again say (under the command of CPU 1) that TSW0/1 are both make-busy, unusable.
Then we tried to switch the CPU cables around, and the problem remained exactly the same: system works under CPU0 but doesn't work under CPU1.
While I possibly have a dead CPU1, would it worth a try to re-format the HDD of side 1, reload system software and programming data and try again on CPU 1? Or does the system keep those HDD-s on side 0 and 1 synced? Or any other ideas?