A Capacitor is what was used to filter the DC, so that's a likely suspect. Good catch!

If you don't have a butt set, you can use a single line (500/2500) phone. Connect alligator clips (or just loose conductors) to T&R and use that. If A battery is not perfectly clear coming out of the power supply, that's your problem.

A battery is really only used (As I Recall) on Intercoms (manual & Dial) and Ring Down circuits (manual & automatic). If you don't have any of those circuits in your system you'd never notice a problem with A battery.

Good luck!

Sam