It's kind of hard to tell, since there is no audio anywhere I would maybe suspect it would be something near the hi-fi chip (or the chip itself) since all of the audio goes via that. Does the deck recognize if there is hi-fi audio on a tape (either via on-screen display or front display, don't remember) even if not outputting it?
It might be difficult to trace where the fault would be unless it's something obvious like a blown component though. The vcrs internals were quite minimized at this point and most stuff is done inside a few chips, plus everything other than the power supply and tuner is on one circuit board that sits under the mechanism so stuff is hard to get to without disassembly.
These Sonys aren't too bad, but they're not extremely valuable either (
ebay has these and related seem to go for like $50-$70. So, depends how much effort you want to put into it and whether you have experience with repair and diagnosis of electronics vs looking for a new one.