First theory of why everything was corrupt was a bad EPROM.
Turns out that I did have a bad EPROM C-7A, however, after replacing the EPROM with a new one I programmed, it still gives the same exact results. I was hoping for an easy fix, but this one wont be. I don't think its RAM, but it could be. It only seems to effect the Character Generation (and Title Screen). If I can get my hands on a set of schematics it would go a long ways towards figuring this out.
Its also affecting the Clouds. If it was RAM I would think I would see more things wrong. Maybe I should look at the source to MAME to see how it handles that. If you have troubleshooting tips that you could give me, I'd appreciate it as well :-) I can't read the Test Mode since the Character Generation is messed up.