You have a problem with character generation, with all pixels in the left two columns of a character erroneously always on (and the problem is restricted to the character portion of each character cell, i.e., the top 8 lines of each 12-line cell). The video RAM appears to be fine. If you poke some screen locations with graphics values (128-191), I expect they will all show up correctly, confirming there is no problem with the video RAM or the video data hex flip-flop in Z28.
The two left columns of a text character are generated on pins 16 and 15 of Z29 (the character generator) and connected to input pins 12 and 11 on the character shift register Z10 (a 74LS166). So the problem is likely: (1) the character generator is bad and is always outputting high on those pins; (2) the shift register is bad and is acting as if the input on those pins is always high; or (3) the chargen and shift register are both good, but the traces connecting them are disconnected or are shorted to a high voltage.
Btw, I tried looking at the circuit trace to see where a problem in the trace would most likely occur, but I failed. Most TRS-80 service manuals and technical reference manuals include images of the circuit traces, but the Model I manuals are a notable exception. I tried looking at the
Sams Computerfacts, which has photos of the component-side trace, but the traces connecting Z29 and Z10 are on the back side. I googled around for photos of Model I boards, and found some good ones of the component side (like
this one), but none of the back side. The internet has failed me. Someone please upload a good high-res photo sometime (or direct me to the one that I failed to find).