VGA debug LED turns on when changing GPU.

I wanted to upgrade to RTX3070, and in my system there seems to be compatibility problem

- when i turn it on debug led stays on VGA and there is no signal output. Before i flashed to newest BIOS i was able to boot up in the windows (with no Video output) and connected to PC trough anydesk.

GPU was not detected, i tried GPUZ, Device Manager, Task Manager. After flashing new BIOS, bootup stops at VGA debug led.

Things that I tried:
Reseating GPU in PCI-E slot multiple times

Tested GPU in different PC (MB: ASRock Z790 PRO RS D4) GPU is detected , i was able to install drivers, couple times tested with Furmark . Everything works as expected.

Clear CMOS(before and after flashing the new BIOS) with 3070 installed in PC

Removed all RAM sticks and left only one G.Skill module

Switching RTX3070 vBIOS

Changed PCI-E slot speed from auto to Gen3 in BIOS

In BIOS default Graphics adapter is set to PCI-E because i have -F variant i5

Tried using different HDMI cable and monitor

Removed AMD driver using DDU multiple times



OS: Windows 11 64 bit.
Specification:

CPU: i5-9400F, (i know its a bottleneck for 3070 ?? )

MB: ASRock B365M Phantom Gaming 4,

RAM: 2x8 G.Skill Ripjaws 3600MHz, 2x8 Team Group Vulcan Z 3200MHz,

GPU(current): Sapphire Nitro RX570 8GB,

GPU(i want to install): Gigabyte Aorus Master RTX3070 8GB

PSU: Fractal Design ION+ 860P   -860W

SSD: 1x Crucial P5 250GB, 1x Adata XPG GAMMIX S11 Pro 1TB

HDD: 3x 1TB 2.5" HDD's, 1x 8TB WD Purple, 1x 6TB Toshiba HDWE160

BIOS version: 4.31A (date: 2023/5/5)
If someone have any suggestions i would be very thankful! At this point im almost given up, put back in the system old RX570, and started to look for new motherboard and cpu.

Already contacted asrock support, only suggestion from them was disabling CSM in BIOS. Motherboard is no longer under warranty. PCI-E slot could be defective, but i dont understand why the old RX570 8GB works fine in the same slot (previously i had GTX1060 3GB that also worked fine).

And yes technicaly motherboard has 2x PCI-E slots, but in my case there is not enough room to slot the GPU in (mATX), dissasembling the whole pc would be an option, but at that point I rather buy new mobo and CPU and sell old parts. From all troubleshooting i understand that BIOS simply wont recognise that GPU is present in the system, so i was hoping that this problem could be resolved by asrock fixing it with BIOS update. Looks like im better off paying extra for ASUS or MSI next time i need to buy motherboard.

Already tried disabling CSM - same result. PC shows VGA debug led.