Looking at the back..bottom right corner is CDR/Tape in and out. Connect the in on the eq to the out of CDR/tape, connect the out of the eq to the in of CDR/tape.
You should then be able to use the CDR/tape monitor button to switch the equalizer in and out.
You need to determine what is triggering the safe mode. Check speaker wiring for shorts and opens and test the voice coils on the speakers for continuity
If the output is fused, check for popped fuses. The output transistors could have failed, but most likely the preamps are not sending the signal to the output stages
This is the audio equivalent of video pixilation. It is caused by interruptions of the signal stream in the digital audio circuitry. And yes, it is hard if not impossible to diagnose. It is easier/cheaper to replace the failed unit than fixing it.
The owners manual says that if the speaker wire touches the chassis it will automatically shut off. You can replace it for about $40 on E-bay which is probably less than it would cost to have it repaired at an audio shop. Search "Pioneer VSX-519V" in Bing or Google and see your options. They also have manuals available for this model. Good luck!