Just dropping in here. For the record, I did a TG16 mod a couple of years ago that used a 2075-based converter, and it worked perfectly. I sold it to D-Lite last week so he could take a look at it.
I haven't tried using a 1645 with a TG16, but I've used them on a lot of my JAMMA projects and other console hacks to good effect.
The other issue is signal strength. The PCE outputs very weak RGB and it needs to be amplified before it's used. I have another encoder here with a Sony chip inside and it wouldn't give good results without using the amp.
I found the opposite to be true. Normally, you need to use resistors to drop the RGB signal levels low enough to work on the Sony chips, but the TG16's RGB is weak enough that the CXA2075 will accept it directly. The 1uF caps on the RGB input lines are required, however.
In addition, the CXA chips make really good RGB amps for TG16 mods. It boosts the signal to just the right level, and it looks really sharp - a lot better than any transistor-based mod I've tried, and really cheap too. I've taken to using CXA1145 chips yanked from old Genesis decks on TG16 mods. You don't need to build the full circuit - just what's necessary to get the RGB passthrough running.
I'm not aware of any source of bare sony chips.
If you're in Japan, you can buy CXA1645p (DIP) chips from www.akizukidenshi.com
for about 1k yen each. They also sell RGB converter kits (which use the 1645p) for 26k yen. There's an outfit in Argentina that seems to sell the CXA1645m, but they're expensive and I don't know how reliable they are.
I've seen some IC wholesalers who list the Sony chips, but of course they'll only ship to businesses and you'd have to buy several hundred dollars worth of merchandise per order.
A company in Japan sells a device called the AV Demiro which uses Sony chips to (Supposedly) convert RGB to composite/Svideo, but their boxes are, while small and consumer-friendly, very useless. They don't work with arcade PCBs tho they say they do, and they don't seem to last long. I got about 10 minutes out of one before it gave up and output only black and white.
That should be easy to fix - it sounds like the only thing that's happened there is that the oscillator's stopped working. If it really does use a CXA chip, you can monkey around with the input resistors to get JAMMA stuff running.
Gutting older systems for parts sounds attractive, but the cheap consoles (Genesis 1 or 2) use the antiquated CXA1135, and the CXA1645 is only available in consoles that cost considerably more, like PSX units or Genesis 3s. Add your removal time to the mix and you quickly get out of the worthwhile range.
The first time I tried making an RGB converter for my supergun projects, I used a CXA1645m chip that I yanked from a dead PSX. It was a total pain in the butt to work with, but building your own circuit from irritating parts like that is a good way to learn how the whole thing works. I wouldn't do it again, though. If you want to make your own circuit, use the DIP version instead.
This page shows what's probably the most useful and cost-effective method - dead Saturns are cheap:http://www.kitanaka.net/~tiff/arcade/video_conv.html
From a cost/benefit perspective, using Gen3s is a bad idea - you'll earn more for your work by modding them for S-Video and selling them than you would by destroying them and using the parts elsewhere. I've seen a number of Gen2s that do use the CXA1645 - later ones only, though. There's also a compatible chip made by Fujitsu that was used in the Gen2, but it's also pretty rare. Maybe 1 in 10 Gen2s has a chip with S-Video output.
P.S. - The chip the Gen1 uses is "CXA114
5" (I think I spotted this mistake on your Gen3 page also).