I'd say go for a refund if they sold you an "original" MS1. Never hurts to ask for board pics before and you can reference them on Jamma nations site or many others. As for the audio, something was probably dumped/written incorrectly and it's not going to be something you can fix easily.
I have the same Boot cart. Had some sound problems with it but I did a quick reflow of the solder pins on the M1 and that did the trick for me. As everyone else said. A total replacement of the M1 may also do the trick.