I've never used an American Saturn so...Could you tell me what all happens when you first turn on a good working saturn, either with or without a game disk already in the system?
With my white Japanese Saturn if there is a CD already in the drive when you turn it on the Saturn will boot the game automatically. If there is no CD in the drive then it show an animation of the Sega Saturn logo being assembled; it will then go to the interface/dashboard/etc whatever you want to call it.
And by the way, I just checked - my Saturn boots up fine without any controllers plugged in.

