I have performed the switchless mod (region and 50/60hz) on a Megadrive 2 (PAL) using a 16f630 pic. It works to a degree, the image on screen changes to full screen. When it is set to 50hz the LED lights up green (as intended), but when in 60hz the led doesn't light up either red or orange for JPN and US modes. I have tested the LED using a separate power source and it is working fully. I have performed this mod twice before without any problems.
Check your wiring, check the LED isn't faulty (does it light up on a battery?)... or post a photo as we can't see what you're doing wrong otherwise!