You should be able to get PS/1 chips for any PS/1 equipment, I order them about every month or so for various locomotives. MTH burns the chip from the original manufacturing files. Whoever told you that you can't get PS/1 chips is mistaken.
It's usually not a chip that goes unless something cooks in the power supply, many times you can replace one or both boards and move the chip.
Unless you like leaving it on the shelf, it can certainly be repaired. Of course they'd like to upgrade it to PS/2, they make a lot more money than just selling you the PS/1 parts you need. 
